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Strategies & Market Trends : Making Money is Main Objective -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (1678)	10/30/2001 2:04:55 AM
From: Softechie	Read Replies (1) \| Respond to of 2155

EMLX TECHNICAL CHARTS (PAGE 4) from Yahoo by: prudentinvesting101 (28/M/Raleigh, nc) 10/29/01 09:59 pm Msg: 50864 of 50875 Key points in the chart. First, it should be very apparent that we closed at an intraday low today despite hitting a new high in the first hour of trading! EMLX was going completely against the market, which made me wonder if the market was truly correcting. But, it finally succumbed to the market and I went short at $25.90. Now, are we going higher? I don’t know. But, I do know this. When a stock is in an uptrend the moving averages diverge. In saying this, the 1-day moving average goes higher than the 5-day moving average and the 5-day goes higher than the 10-day average and the 10-day goes higher than the 15-day average. The stock appears to be rifling straight up. Then, consolidation occurs. Eventually, consolidation occurs because stocks don’t go straight up or down. Look at the weekly and monthly graphs and you will see price overlaps each month. The stocks typically consolidate within each graph. So, the 1-day moving average is $24.61, 5-day moving average is $24.77. The 10-day moving average is $23.49, the 15-day moving average is $22.10 and the 20-day moving average is $21.01. The 50-day moving average is $19.83 and the 100-day moving average is $23.86. Normally, when a stock goes up for 5 or 10 years the averages appear in straight lines or never cross, reflecting the growth in the business. But, lets face it. The economy has slowed and this might have to be thrown out the door. Once again, I will put more weight in longer-term averages. The 100-day is more important in the long-term than the 50 vs. the 10…you get the point….. BUT, in such an environment where the stock appears to be turning over you want to focus on the 50 day moving average. Why? In a true uptrend the 5 day EMA goes above the 10 day EMA and the 10 day EMA above the 15 day EMA….the jist of it is that the daily price does not cross the 50 day average in a TRUE uptrend (One that has growth and strength and reflects the fundamentals.). If the daily price falls below $19.38, where the 50 day moving average is, look out below! I don’t know where you will bottom out but it indicates that the uptrend is completely over and that a new round of selling pressure is upon the stock whereby a new low will be formed eventually. Everyone wants to know where? What price damnit! Stocks are priced on fundamentals in the long-term. So, what are the fundamentals. Is EMLX going to grow sales and EPS this year or decrease them? What is the long-term growth rate? In troughs low multiples are paid, as a multiple of earnings and revenue. If you believe the bearish case you would say EMLX will trade like NT, LU and telecom equipment stocks that have been hurt. Or, you may say that the stock will trade based on the 5 year EPS growth forecast. So, what are these prices? Based on the 16 analysts following EMLX the company has projected sales and EPS of $300 million and $0.37 this year and EPS of $0.52 projected next year. This is using information presented in the section of yahoo for EMLX. Click biz.yahoo.com if you would like to see for yourself. If EMLX does do both #’s the company will grow EPS at 41%. We do need to recognize that, according to the link above, EPS estimates have plunged this year as the economy has slowed. Heck, EPS estimates were $0.51 cents (next years EPS estimate) just 90 days ago! But, lets say both #’s are attained……… (continued)