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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (7390)	3/27/1998 5:03:00 AM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

I only have Internet based charting available to me right now. Here is a quick look at ADBE. I see that ADBE has been in a basing pattern for about one month that was a result from a prior downtrend and rebound of the stock that ended with some distribution. A few days before the breakout showed signs of accumulation. Volume was increasing as the stock edged up to the top of its trading range where the 200 day MA was providing support at the bottom. The stock is above its 50 day MA which appears to be in an upslope. The stock broke out of this basing pattern and moved up by about 10% under at least 3 times normal daily volume. If it were not for the significant price improvement I would of been looking for signs of distribution. A quick look at the tape appears to tell me that most large block transactions took place in the morning after 10:15 A.M. There appears to be allot of SNET activity on this stock including some larger blocks that are traded to clip a fraction of a point off which indicate a shorter term focus on profit. Overhead supply was encountered at about 45 1/2 which took some trades including a few large block purchases to break through. By the end of the day there appeared to be a net accumulation of large blocks. However most of the price rise appears to have come after some profit taking at about 1:30 P.M. This is when most of the large blocks have already been transacted. I would expect the price momentum to follow through tomarrow, but I would not be surprise of a pullback. This would be a good time to see if the uptrend has any staying power. The stock was not in a oversold condition when the uptrend started. Even though the breakout came as no surprise, this burst of very strong activity must of been news driven. A perusal of the news wires hits paydirt: two events today. Adobe reported 1Q 1998 earnings to be 1/2 of same period last year, and a 6 cent earnings disappointment. Ye the stock hits the sky. The company also added a few executives to their "world wide" corporate positions, and declared a dividend which IMO is a bit strange due to the disappointing results compared to last year. Here this happens of further proof of effects from the Asian problem and a continuing downturn in earnings growth, and on the heels of concerns about the Fed meeting next week to tighten the money supply. This indicates to me very bullish...actually very speculative type of market sentiment that was encouraged by the price action today in INTC even though the actual price change on INTC stocks was small percentage-wise. ADBE relative strength has been poor but improving. Heck Intel did not report anything today except what I would see as the negative news with the departure of Andy Grove. But they did announce a step up of their share buyback program. They are due to report earnings two weeks from now. I look for forward positive guidance that can account for this and have not been able to find any other than their earnings warning. I also see announcements of price cuts (drop in margins) due to slowdown in PC demand in the U.S. market (not Asia) and a delay of an opening of a fab plant by two years. Oh, Intel has announced that it has ben on an investing spree of startups and public traded companies which include 20% made up of foreign concerns. This market will take their investing spree as good news. We cannot forget that there are brokerage firms still rating this stock highly even at a "strong buy". There appears to have been no recent analyst upgrades. This is looking more like the makings of a blowoff to me now that we see this type of price action starting to show up more back in the techs under these overall fundamental and technical market circumstances. The market responds to any good news even though they are contrived by the respective companies like share buybacks and dividend declarations. What is of substance is the comparatively bad news that this provides a "sugar coating" for. Have you seen other high tech plays today like this one under simular circumstances? I wonder what the short interest is in ADBE considering the plunge in price it previously took which it partially recovered from? The fundamentals have not changed and those shorters generally are terrible at timing. Did I give you more than you asked for? Bob Graham