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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jimleon who wrote (45140)	5/28/1998 10:23:00 AM
From: Lee	Read Replies (1) \| Respond to of 176387

Jim,..Re:<<"overbought" is a total crock.>> Barrons Financial and Investment Handbook defines overbought as follows: Overbought description of a security or a market that has recently experienced an unexpectedly sharp price rise and is therefore vulnerable to a price drop (called a CORRECTION by technical analysts). When a stock has been overbought, there are fewer buyers left to drive the price up further. Considering that this is fairly common terminology, at least in the trading world, what sense does it make to ridicule an accepted and useful description? Is the Dell thread only for those whose terminology and investing practices are approved by the Fundamental investor types? I just don't understand the ridicule. Regards, Lee

To: jimleon who wrote (45140)	5/28/1998 10:26:00 AM
From: Walt Corey	Read Replies (1) \| Respond to of 176387

I disagree on the over(bought/sold). I am sure there are synonyms out there but clearly Dell at $98 was over'bought'. Supply and demand. Everybody wanted to buy Dell and nobody wanted to sell, ergo the price went to that point where enough longs were willing to take their profits. One can call it anything they want, personally I, and others, use overbought or oversold. Similarly, when more people want to dump than are willing to buy it goes to oversold. I think the issue of value is different but related. The market values Dell, right or wrong, as a hightech company. This reward comes in the form of an aggressive growth multiple. I think generally this multiple stays relatively constant with value. uSoft is a good example, with lowering P/E's they are commanding even higher valuation, by way of earnings multiple. Maybe in this sense on could view valuation, over/under as strategic and overbought/oversold as tactical. I guess the point I am trying to make is say Dell enjoys a forward earnings multiple of around 40, that would place their stock at around mid to high $80's, $98 then is a short term aberation, as is $81. With Microsoft seeing lower and flattening earnings q to q and the market granting higher and higher multiples that is overvalued, not overbought. On the other hand, it could all be quantum mechanics. Walt