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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (535)	3/3/1998 3:08:00 PM
From: mod	Read Replies (2) \| Respond to of 1418

Somebody has been hitting the offer this afternoon, buying like crazy in 1,000 share lots, driving DSWLF up over $1. Feels much better then when they are whacking the bid! Dennis

To: Ron Bower who wrote (535)	3/3/1998 11:14:00 PM
From: Richard Barron	Read Replies (1) \| Respond to of 1418

Ron, I know many of the trading patterns but it's sheer luck when a stock follows a pattern that one expects. I was surprised how much selling there was last week. If the volume stays up above 50,000 shares, the climb should be rapid and steady. 21-1/2 is the 200 day moving average. Connecting the highs from 7/24/97 and 9/5/97 will possibly show a small amount of resistance at 24. Connecting the 9/5 and 10/20/97 highs shows a small resistance 23. Otherwise the peaks are at 26, 27, and 28 with only the 28 being a major resistance. If it exceeds 28, the round # of 30 should provide some selling. I don't know if it will take a week, a month or 2-1/2 months, but based on it's pattern last January, February, it may run to 24 in less than 2 weeks, retrench towards 21-1/2 or 22-1/2 for a week or two and then launch towards 26-28. It's only a guess and it may run different from last year. Is it undervalued? I don't buy stocks with P/E's over 15 very often. This one is still under 10, so I say definitely yes, I think it is undervalued. I think it should command a P/E of 15-20 based on a higher tax rates, so a P/E of 10-16 should do the job. After 1-2 more quarters with continued growth in excess of 20%, the P/E should move at least to 20 and if the tax rate looks like it will stay steady, then I would guess 15-20 times reported earnings. I will likely lighten up on a trading portion when the stock gets near 30 and buy on 12-20% dips. Probably not a wise move, but I sold most of my warrants between 5 to 7-3/4 after the run up and then bought back some at 4-5/8 and 5-1/4 as well as 3-5/8 after the big drop. I frequently lose too much of a good stock by selling too early, but if there are other values out there, I don't want to get overexposed to one stock. Just my ideosynchrasy. Richard