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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: joe who wrote (18713)	7/6/1998 7:29:00 PM
From: Wayners	Read Replies (2) \| Respond to of 45548

Now remember I tried to show people how to identify the second bottom at around $23 1/2 to $24 1/2 using a simple trendline. That worked pretty well. I thought that after that COMS would go back up to $27 1/2 which it did, but after that I wasn't going to make any predictions because of the earnings announcement. So I wouldn't have held long through the earnings announcement and I would have missed out. No problem however because myself and anybody else that didn't want to hold through the announcement may be getting a second chance at $27 1/2. Wall Street has a great way of giving everybody second chances on stuff. As far as identifying the trend on COMS you can do it two ways. You can put a short term moving average on it, like 10 to 15 days. Or more simply just draw a line connecting the recent daily low prices. Since its upsloping, COMS is on an uptrend. The trend turned positive without question after the earnings announcement. Look at a 12 day moving average. The price jump changed the direction of that moving average right after the close on that day. <<Does this mean you'd hold on? Or do you just play it by ear?....possibly waiting to see if COMS next earnings report keeps boosting the stock up?>> I'm not sure I follow. If I was long COMS, as long as the trend remained up I'd stick with it. Remember COMS going back to $27 1/2 will not change the uptrend. It may slow it down a little bit but that's all. If the price stays down there too long or goes too low, you can say goodbye to the uptrend--but I don't think that's going to happen. Demand for COMS shares is going to pick up between $27 and $28. If COMS has truly turned the corner as management has said, then Wall Street should drive COMS up in advance of the next earnings announcement. It should be a good quarter for COMS the stock as higher expectations are built into the stock price. Remember though that the next earnings report is a long ways off (at least for me). All the next earnings report is going to do is keep COMS on the uptrend. Of course the price will fluctuate within the trend. <<If we had broken resistance at 32 1/2 and probably gone to 36 lets say (the next resistance), then we'd be doing all this retracing til the previous support of 32 1/2 correct? (provided no major news that upsets the pattern I guess)>> Now thats a good question. I never call the end of run until I see something that tells me momentum is slowing. On this run I saw volume suddenly drop off the day after earnings. That was the first clue. A few days later I saw the volatility peak as the bollinger bands on price started to contract. If the price had kept going up on higher volume and went to say $35, I'd again be looking for slowing momentum. A retrace there to support would go to either $30 or $32 1/2. A run like that would attract a lot of attention and it would be my guess that people would be quick to snap it up long before $30. You would definitely not get the retrace to $27 1/2. Don't get me wrong I'm playing the internet. Not in Yahoo, but rather NSCP which I think has topped (I will look for an exit tomorrow) and I'm also playing USWB which I think has one or two more days of life in its run.