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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Charlie Tuna who wrote (4503)	10/29/1997 11:03:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 11555

Yes, IDTI is moving off the lower bollinger band after punching through it - this is a very bullish TA indicator. Also it is pulling off the lower stochastics extreme - also bullish. Indicators like these do just what the term implies - they indicate the meaning of movements in the stock or sector price. For instance, the bollinger bands are based on historical data, of course, and statictical "band" the chart, usually by two standard deviations or about 96% of the movement of the stock (most programs let you adjust the # of std. deviations about the mean). So the price tends to move within the range of these bands 96% of the time. There is usualy a plot of a moving average to indicate the general trend of the price movement. So if the stock is trending flat or up and it is at the bottom of the bollinger band, then it is most likely going to move up. When a stock punches through the bands, then it almost always quickly pull back to within the bands. If your judgement about the fundamentals and events that are shaping the stock, sector, and overal market are positive, then that increases the probability that the TA indicators will prove to be valid. I use fundamental analysis and try to understand the events shaping the stock, such as new product introductions and general mood of the market and sector. Then I use the TA to confirm when to buy or sell. Obviously big news items that are not discounted in the stock price can move the stock regardless of what the chart says. But when the charts and news complement each other, the price movement is amplified.