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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jay Lyons who wrote (13262)	8/21/1998 12:40:00 PM
From: Jenna	Respond to of 120523

I would not buy anything because of a perceived 'rally'. Rallies of this nature reminds me of rallies in the oil service sector. The rally is strong and can be 5-10% on singular issues but the trend of the sector is down and all rallies are short-lived. I would only only enter into short term/intermediate trades once a rally is followed through with the index increasing at 1-2% and exploding volume. And even then it would have to be the fourth or fifth day of the rally. The 'short rallies' are based on 'dead cat bounce' rallies and are good for a day trade or swing trade. I've gotten some e-mail on particular stocks but at this point, I must say I feel safer staying with the index options because they move as a whole and their volume increases and trends can be perceived easier than any particular stock. This weekend in edition to the newsletter of earnings plays there will be some analysis on stocks that could be the first to make gains when the market stabilizes. I'm holding my September puts over the weekend and holding all other put positions. I'm compiling volume/price increase on stocks since the beginning of this week and I noted that on the 'good' days stocks that have been on the earnings plays newsletter and have already made gains, made further gains on these 'good' days: BOBE 20 7/16 +2 1/8, EAII 52 +5, REXI +1 1/2, SMOD 21 3/8 +3 19/16 WFMI 49 5/16 +3 13/16, CMOS 20 1/2 +1 1/2, CGX 64 3/4 +5 1/4, SERO 24 3/4 +2 7/16, NSIT 55 1/8 +3 1/8, INSS, 42 5/8 +4 5/8, STNRF, 29 5/8 +1 3/16, PCCC 24 3/4 +3 1/8, What this tells me that betwixt and between these down days the 'up' days will have the 'earnings beaters' surging ahead of the others. b) On the other side of the continuum the worst hit stocks with lowest relative strength will also show gains. c) Sectors normally hi-flying (internets) will be the first to rise as well. You will do well if you stay on the sidelines when unsure. Fortify your positions with puts.. It's a bit late now for September puts.. but sector puts might be the way to go. If there is any indication of a trend reversal by days end I wouldn't be adverse to picking up some (very little) calls for possible 'rally' on monday..although I'm still very unconvinced.