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

To: joe who wrote (22780)	10/14/1998 5:13:00 PM
From: Wayners	Read Replies (1) \| Respond to of 45548

When a stock is running really good--not in one of these crappy trading ranges, its fairly easy to pick peaks to sell into. At tops, price starts to take off at a rate much faster than it has the previous part of the run. At the same time you will see volume spike up a lot. That's your cue to exit. What you are seeing is greedy buying by longs who think--wow with the way this thing is moving here is some easy money and you are also seeing panic covering (fear) by short sellers. This exhausts a lot of buying pressure in a quick period of time. When it ends, prices drop. You have to wait for price to stabilize/base out on low volume--hopefully at some kind of support level before buying back in. I usually place a buy stop higher, just in case it starts to run again. I don't think what you saw was extensive profit taking--just a drying up of buying pressure. That is usually what causes those low volume price dips. Normal supply just outweighs demand (now nil) at that point because everybody that wanted to buy bought when they thought they saw easy money to be made--and they were all dead wrong. There was nobody else left to buy--smart money wasn't going to buy the run. I have to have the discipline to buy on a further dip or a break of $30--nothing in between. Buying at $29 may not be aggressive enough. Uptrendline is currently at about $28 1/2. If COMS is forming a head and shoulders just over the last few days, $27 1/4 is shaping up as the neckline. I suspect that $28 1/2 will hold. I'd buy any gap downs and sell any gap ups.