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Strategies & Market Trends : MP - Market Pulse -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (62)	6/22/2001 3:21:56 PM
From: t2	Read Replies (2) \| Respond to of 1328

LG, As you might know, I don't use charts. Do have a bit more respect for it now but only away from the periods around the quarter ends..such as March 31 and June 30 as I feel that more is at work in these periods. My logic is quite straight forward. Stocks that get beaten up all within one quarter, will not look appealing on mutual fund statements at quarter ends...creating the selling pressure. I noticed the same thing happen when we ended December month end. Stocks like PCS, AWE, Nextel were down so much that they were sold indescriminately...the bounces that took place were about 50% in these names (in only about 1 or 2 weeks after year end) ....only to drift down later. Short covering also becomes a factor as well as those that bet funds will be liquiditing positions start covering once they see an end. It is a very common occurence....meanwhile the charts will continue indicating that it will get sold off. That is why many TA did not catch the bounce in early April...after quarter end! The bounces in early April were in the stocks that were beaten up the most in the March quarter. (i am referring to the tech sector) Again, the bounce was the greatest in the stocks that were beaten up the most (JNPR types); the type of stock that will make the mutual fund manager who bought in the past few months look really bad. That is my logic for why an NTAP, GLW, JDSU can make significant bounces.. I guess chartists like yourself would just call it oversold conditions...while someone like me looks at the fact that it is quarter end...and this time it is 1/2 year end. I don't know if that is what you would consider sound reasoning but everyone has their own methods....and it has worked very well for me. I thought I had put my reasons for expecting a bounce in my last post. If you feel that it is not analysis, I will understand as this is your thread. BTW--as for bouncing from what levels..I basically buy in over the last days of the months..averaging my cost; positioin trading. I have not bought NTAP yet, but it is one on my list. To me the average cost over the last few days is going to be much lower than what I would expect after the first week...not specifically NTAP. I try to buy a basket of such stocks.