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

To: Clint E. who wrote (17888)	10/5/1998 6:37:00 PM
From: space cadet	Read Replies (1) \| Respond to of 69775

Clint, Msft is sort of a special case. First it has a monopoly which is worth a lot right there. Second it hasn't broken support. Thus I don't expect it to fall to $40 and will buy it in the price range we previously mentioned. However, given that a stock like psft has broken support and entered the free fall domain I think judging it on the basis of traditional value criteria is a wise and prudent approach to picking a bottom for it. Of course, as you probably know, I am more of a short term trader (few weeks at a time) than a buy and hold type guy. Thus I sometimes play short term moves of stocks on their way up or down. I agree with you that there are plenty of cheap looking stocks around these days. However, they may get cheaper because their earnings may suck, for example, the dd and semi industries are taking a lot longer than anyone expected last year to recover from their woes. Also, future growth rates will not be as high as previously expected thus also knocking down the stocks using the peg formula. For a stock like psft that has broken all previous support levels I don't expect to see much of a recovery for a long while. And I don't know if it will ever get back to its previous heights. Probably the industry will consolidate and somebody may buy it out first. I don't think I need to remind you about the difference between stocks like cien and psft vs msft and dell. msft and dell are weak but have maintained their support levels. Thus they will bounce back and probably continue setting new highs, though personally I think dell is getting pretty close to the end of its run. I see one last rally for it and then I think it goes into a trading range for a long long time. In short, you can't judge all stocks by the same criteria. I use a combination of technical and fundamental evaluators and I never try to fight the charts. Incidentally sunw has been in a trading range seemingly forever and I think its valued appropriately for its prospect so I guess we do have some fundamental disagreements. Some of the others that you mentioned may look attractive but there's still a fair amount of risk associated with them which you may be overlooking... But I agree with your main point that investors always are too enthusiastic at tops and too depressed at the bottoms. I would like to see a 100 point down open tomorrow and then I think I will get in long. I see a short term rally, for at least a day or two coming, and I may try to play it this time. I've mainly been watching and in cash for the last two months...