Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Beachside Bill who wrote (14598)	6/7/1998 12:13:00 PM
From: DanZ	Read Replies (1) \| Respond to of 53068

Market comments, ADPT, IRF, ZRAN, TXN, VLSI, ACLY. Market comments: I still think the market averages are going to remain in a wide trading range for a while. The Dow Industrials, SPX, and OEX all bounced off their lower daily bollinger bands last week and appear to be heading for a test of their upper bands. Resistance is 9200 to 9260 (Dow), 1130 to 1135 (SPX), and 545 to 550 (OEX). The Nasdaq is the weakest right now with resistance at 1850 to 1880. The OEX is the strongest and I expect it to make a new 52 week high on this move. The daily indicators are still somewhat oversold and there's a lot of momentum behind the move. This adds up to a retest of the old highs IMO. The SOX held major support at 240 and I feel more confident that it has put in a bottom for this down cycle. The SOX has historically rallied over 100% from it's low over a 12 to 15 month time period. That would put the SOX near 500 and many semiconductor stocks double in price from where they are today. You think I'm crazy making this kind of prediction? Maybe, but given the technical condition of the sector and the fact that many analysts and trade associations believe that semiconductor sales will begin recovering later this year and into 1999 and 2000, a rally of this magnitude isn't out of the question. Options on the SOX are also available for those who share my opinion on semiconductor stocks but don't want to bet on a particular company. PLEASE, and what I'm going to say next is very important: These are my opinions only. Please do your own research and make your own decisions. My intent is only to share what I see happening in the marketplace and not to encourage anybody to make a certain trade. ADPT: This stock looks like it has bottomed in the 14 area. It rallied to resistance near 16 on Friday and then pulled back after a stock picker on CNBC gave it a bad rap. However, the pullback on those comments reinforced the bottom in the 14 area so I think it was good that it happened. It also gave me an opportunity to add to my position at 15 3/16 after I day traded it earlier in the day (in at 14 15/16, out at 15 5/8). If the stock gets through 16, look for it to test 17 to 17 1/2. I should also note that Al Franken (Prudent Speculator) wrote APDT up as his number one stock pick in his newsletter that came out last Friday. He recommends buying the stock up to $19 a share with an 18 month range of $35-$38. This will probably give the stock a pop on Monday morning and then we need to see how it trades the rest of the day. IRF: Yuck, what can I say. I don't like the chart on this stock and think TA is out the window for now. For me, it's a value play in the semiconductor sector and I think the chart will eventually improve and give a buy signal. As noted earlier, I like the semiconductor sector in general. I don't see the stock trading below book value so that puts the absolute floor at 7 3/4 although I don't think there's a very big chance that it will go that low. The stock is now trading at 0.91 x sales which is ridiculous given the company's long term growth rate in sales. I posted some more analysis on this company on the IRF thread if you are interested. I am not selling my position at this price and think it will eventually be a very profitable position. ZRAN: For you Bill, I would buy this stock with a stop at 9 3/4 and use a target of 13 1/4. The daily momentum indicators are pointing down so it might be better to wait a few days to see if it trades sideways and the momentum shifts. The stock looks good from a risk to reward perspective, however. TXN: This stock looks very good after basing at 48 three days in a row and then rallying through resistance at 51. I would look for the stock to test 55 to 56 and then move much higher with the SOX in the coming months. VLSI: VLSI looks very good to me, and given my opinion on the SOX (of which VLSI is a component), I think the stock has likely made a low for this down cycle and will be substantially higher in a few months. It closed just above resistance on the daily chart at 16 1/2 on Friday after spending much of the day basing. It then rallied strongly into the close, very bullish technical action. I expect the stock to test resistance at 17 1/2 and then move to 19 - 20 if it gets through there. ACLY (a year 2K stock for you Sue) has major support on the weekly and monthly charts at 12 and bounced off that again last Friday. The relative strength, ultimate oscillator, and stochastic all gave bullish divergences last week because the stock made a new low for the move but the indicators didn't. Almost half the volume on Friday was on up ticks, another bullish sign. The only thing I don't like is that the lower daily bollinger band is declining, but it should flatten or turn up if the stock trades sideways to up for a few days. I'd feel better about buying it when that happens but the risk to reward looks very good right now with potential to 15 or 16 if it gets through 13 3/4. Have a nice week everybody; I'm going to be out of town most of the week again. Dan