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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Nick Kuritzky who wrote (46614)	5/11/1998 8:45:00 PM
From: Greg Jung	Read Replies (1) \| Respond to of 61433

Yes but its still early in the week, which is about how long it takes to swing the mood. A lot of analysts would love to be vindicated in their "long term buy" approach taken back when it was 50, they all jumped ship after it had broken the support level of 38 (40 was also significant before it was pierced). Ascend has had a blitz of media and analyst upgrades. When the tide begins to turn a little the other side comes out of the woodwork. I wouldn't be surprised to find some general random concern about network spending because consolidation of telecoms might stretch the budgets. Then later another fellow will find the mergers bullish for the equipment makers. Everybody is trying to think "sideways" and look smart. As a result we get mostly turned in circles if we follow the whhipsaw. Basically upgrades/downgrades can be done in your sleep: read the chart, if it looks "good" then its an upgrade. Not to say that it'll happen soon here, but on several stocks an upgrade/downgrade cycle can be only a few weeks, even from the same brokerage. Basically if you find a story that can be told, take it and fly it until it runs out of gas, then go hotwire the next shiny vehicle ready for taking. One radio show locally had two analysts for stock questions, the first one would go over "fundamentals" and the second would analyse the technicals. The first criteria the fundamental guy would use was, how well the price had increased since the beginning of the year. Anything that had fallen would get an instant disapproval, even though most of the stocks spend 1/2 of the year at 1/2 of the 52-week high. They sneered at DEC when it was 35, 30, 25 and liked it after it had broken 40 and was pushing 60. Ditto COMS from 60->90, when the CEO frowned about current revenues they took it down 9 points in 15 minutes. Mory is different, he only smiles - even when they had no earnings after the first month of the lousy quarter. Today there was an upgrade to the big server makers DELL/IBM/HWP with meager price target raising. What reason? "The earnings multiples have expanded". Analyst-speak for asset inflation. Another nice cliche' is, "the chart looks good". This is only good for the next few hours of trading, or the next week in a good market. Good charts get instantly turned into ugly charts when significant corrections happen. From 32, Ascend went up about 15% in about 4 days, and from there its gone another 20% in a few weeks. You don't believe this can happen in reverse? Actually it usually happens faster on the downside. Didn't it go briefly from 40 to 36 and change recently? To my untrained but semi-experienced eye, the price action since the continuous rise to about 37 has been eratic and contrived. Also remember that in general the stock-specific aspects are only about 10-15% of a stock price. Market is about 45% and sector another 25% or something. Good sector, good stock, but fully priced and the sector, market are very volatile. Get your cash ready but don't shoot until you see the whites of their eyes! And keep off of leverage until things are ludicrously cheap, not just ridiculously cheap. Just tuck the stock away and forget about it, or consider yourself a "renter" and not an "owner". Greg