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Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Dan Michaels who wrote (834)	2/19/1998 9:23:00 AM
From: Harley Morgan	Read Replies (1) \| Respond to of 2882

Those fundamentals really haven't changed since 10/13/97 when ADI closed at 36 1/4. Then why has the stock gone as low as 23 3/4. A 34% decrease in value. Because many other factors impact the market pricing of a stock - economic environment (sans SEA), supply/demand of stock shares, etc.. The chart is a reflection of all these sentiments. I chose to invest in fundamentally sound companies - Good ROE (over long-term)and revenue/earnings growth. I chose to time those investments with the supply/demand curves on the charts because good fundamentals alone do not determine prices. The charts support/resistance and patterns are good indicators (not the only one) of how the market is treating a given stock. Why did ADI hold the 8/18/97 32 1/2 low point for so long (until breakdown on 10/23/97)? Because 32 1/2 established a resistance point with a large volume of shares changing hands and market Psychology determined this to be a new safe bottom. Once broken this now has become a major testing point for an uptrend. Why? Because market sentiment now says the stock may not be worth any more than this price. And this level was retested many times. Therefore, you could have bought the same fundamentals for $36 all the way to $23 3/4. At which point would you like to place your bets?