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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Scott H. Davis who wrote (994)	5/27/1998 1:04:00 AM
From: HeyRainier	Respond to of 1720

[ The Market, SAVLY, ALNK, ISIP, MRVC ] Scott, I don't have sophisticated enough intraday techniques to be able to pick a price point where I would expect a reversal to occur for the broad markets. It's tough enough trying to get it on a daily basis. I'm just making the observation that the market has continued to lose strength in its upward momentum, and that the recent conditions gave opportunities to sell into the flagging strength. I don't know where it's going. Just not up--at least not in a strong fashion given the weakening momentum and other indicators I follow(knock on wood). I wouldn't be surprised to see some strength though, as the bond market's strength has actually made stocks relatively more attractive than it was versus yesterday. A stronger picture for the dollar is also expected to reduce inflation, which should have had bullish implications for the market. We'll see. It's just that the markets don't paint it that way. Also, I don't suggest you touch ALNK. Not when it's in free-fall mode. The price yesterday closed at the bottom Channel boundary and was combined with a White Hammer, so I expected at least some price stabilization to occur at this point. Today, it closed below that channel boundary. Caution is suggested. Actually, let me change that: Avoidance is suggested. Do not try to pick bottoms on stocks that have fallen below critical support. Let the downward momentum ease up, and let the sentiment balance out. Irrational occurrences can often have negative impacts on one's portfolio. As for SAVLY, $35 seems to be a potential support level, but don't get too encouraged because the price decline hasn't ended yet, and my indicators haven't reversed yet. This also fell below critical support past the 150 day moving average. As I was once told, your risk is exponentially heightened by acquiring issues that trade below this level. Indicators became bearish late April, and have not reversed yet. Currently, I suggest you Avoid, regardless of valuations. One thing to note, however, is that the price did close at the long term uptrend line. If you do buy, set a stop in case the price also fails past this level. If the price stabilizes, expect a Bearish Flag to potentially form. As for ISIP, the trend line boundaries have been readjusted to show that the Ascending Triangle formation is once again intact (the boundaries have been expanded for a larger formation). The bottom rising boundary coincides with the bottom Bollinger Band, so expect some firm support to materialize at these levels. Stochastics haven't reversed yet, so take caution. And for MRVC, the indicators are bearish and the short term trend is down. Wait for stabilization. Regards, Rainier