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Technology Stocks : INTEL TRADER -- Ignore unavailable to you. Want to Upgrade?

To: MonsieurGonzo who wrote (3547)	8/22/1998 7:12:00 PM
From: Berney	Read Replies (1) \| Respond to of 11051

A visitor sends me a private message to look at SLE I haven't followed SLE (Sara Lee) in the past, other than to know it was, at least at one time, a favorite of the Beardstown Ladies. But it's an interesting stock that brings into play a lot of factors. From a FA perspective, I would want to know what caused the current negative earnings per share, and that management is adequately dealing with the issues. My scoring system compares a lot of factors to the current earnings per share. When the earnings are negative, it simply cannot score well. However, 8 of the top 10 mutual funds that own the stock were adding to their positions last month to the tune of some 8M shares (they probably wish they had waited a little longer). From a TA perspective, the 25% decline, since its close at $62 the end of March, has been dramatic. But, SLE has witnessed dramatic and prolonged declines in the past. It fell from $30 in late 92 to $20 in mid-94, a 33% decline. It started the last run in mid-96 at $30. The problem with many of the stocks like SLE is that its tough to see the support and resistance levels when the stock has gone parabolic. However, the stock should have good support at $44.5, from July 97, and ultimate support at $40 from 11/96 to 8/97. The daily and weekly trends are of no help since they have been shattered. The monthly trend since 94, however, shows that we should see good support at $44. The fibonacci retracement percentages are frequently the only manner of gauging support levels for these parabolic stocks. Using the retracement levels of 38%, 50% and 62%, the corresponding support levels are $50, $46, and $42. I see no evidence in the charts that $46 will hold, but would be looking at an entry price of about $44, with full knowledge that a further 5-10% decline would be possible. These days, if I'm buying LEAPS, I want to see that at least the daily charts are showing a breakout from the downward trend and the end may be near. For example, look at the daily charts of DIS, GE, S and UK. In fact, it looks to me that the aborted breakout of BA is even still intact. BWDIK and all other disclaimers. Berney