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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (17552)	8/6/1998 11:06:00 PM
From: Filippo Zucchi	Read Replies (1) \| Respond to of 69155

I do not trade strictly on TA, but I do believe that TA does represent the graphic depiction of supply and demand for stocks and as such it adds vital insight to investing. Having said that, I also try to keep it simple: mov. avg's, trend lines, volume indicators. If you look at these basic tools, the broad indexes have broken down on all fronts, suggesting that the trend is now down at least to the next level of major support, which on the Dow is at about 7500. As for today, bear market rallies are usually far more vicious (for shorts) than bull market spikes and it looks to me like today was one of such rallies. That's not to say that these rallies are not tradable on the long side, just far riskier. For the longs, there may also be another opportunity finally opening up - value investing. Value stocks are much safer in down markets, have been disregarded for years, and they often can be found in countercyclical industries. Some of my favorites right now are Smithfield Foods (SFDS) - single digit PE mid 20's growth rate, market leader, insider buying and bouncing off major support. AT&T - say what you want about the TCI purchase, but this is the 900 pound gorilla which has gotten its bottom line in order and now can focus on the top line - at mid 10's PE, 3% dividend and billions in cash, it's the place I want to be in if we are in a bear market; strong support at $55. Cendant - See through the smoke and you can buy some of the top franchises in the world at low teens PE - economy is a risk, but I can't imagine there is much bad news left out there - on a closing basis $15 appears rock solid support, if for no reason other than it's about book value assuming CUC's businesses are worth $0. A few more aggressive picks: Fortune Brands (FO), PMCS, Whole Foods Market (WFMI)(although I would let this one base for a while), Segate ($20 held thru just about every piece of bad news, 12 PE on '99 estimates), Jones Phar. (waiting for an acquisition to break out; no debt, $115M in cash). Just my ideas on a boring Th. night. Please let me know what you think - that is why I wrote this in the first place. Happy trading.

To: j g cordes who wrote (17552)	8/6/1998 11:24:00 PM
From: Johnny Canuck	Respond to of 69155

Jim, Nice job on CA. I was looking at it but I have not had much time to babysit positions the last little while. That will be the situation for a little while longer too I am afraid. I am still looking for 8150 on the DOW though , so I would be more inclined to be short than long. On PMCS, I will be watching it and let you know if I decide to go long. I am been so busy I forgot about my limit order on NN at 29 5/8 Canadian. It looks like I got a bunch more yesterday. It looks pretty weak right now though. The end of the Q was July 31. Some of the BT revenue was suppose to flow through this Q. Harry

To: j g cordes who wrote (17552)	8/7/1998 1:04:00 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 69155

Jim, It looks like PMCS left the station without me this time. PMCS is up 3 today so far. I don't have intra-day charts today, so I don't have a feel for what is happening. The site with the charts has a problem wiht its data feed. It has been flat line all day on PMCS. Looking at the options OI it look like a finish between 35 and 40 in Aug would let the most options expire worthless. First upside target is 38 from a technical basis. I have fair fundamental value at 36 dollars. Some analysts have at 12 month target of 49. They got a positive mention in a SmartMoney article today. That with the general bargain hunting in the chips and chip equipment today seem to pulling PMCS along. I still believe this is only a bounce in the market though. Devaluation of Asian currencies especially the Chinese YUAN is still a wild card.