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Technology Stocks : LEGATO SYSTEMS LGTO -- Ignore unavailable to you. Want to Upgrade?

To: Michael W. Brom who wrote (237)	10/16/1998 1:39:00 PM
From: Ron Kline	Respond to of 1138

I think LGTO is a buy in that range partly because nothing fundamentally has changed with the company. They beat earnings the best in this quarter and EPS continues to climb. I think part of the volatility is because of the high PE. When they market is not on firm footing these stocks can become volatile. Look at the chart last November of LGTO on Yahoo or wherever, and you see the same bumps just smaller because of a lower base price. Once the market really reversed at the end of Jan the stock jumped to a new high. I tried to buy the stock a couple weeks ago on this expectation and I failed but didn't lose much money. If you buy on a dip just be prepared it may go lower. I find it hard to buy on dips but many people can do it pretty well. We are caught in price between the 50 day and 100 day moving average which is at $45 and $35 respectively. Many people don't like to buy a stock until it holds above the 50 day, some buy right at the 100 day because they feel that acts as support. But the best stocks need to hold their 50 days so if you buy you want to expect it to cross and hold if the market is rebounding like I suspect. One more positive EPS and RS still hold at 99. If a stock goes down and the RS also goes down that's bearish. If the RS holds in a down movement the internals are still solid even if the movements seem scary. Hope some of this helps. Ron