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

To: xcr600 who wrote (18365)	11/16/1998 1:23:00 AM
From: Clint E.	Read Replies (2) \| Respond to of 68115

Hello XCR600. If you don't mind me asking what does xcr600 mean? Shorting stocks? As I said previously, I am not good at picking shorts but I give you a few practices that has worked for me in the past. Perhaps others can share their methods and thoughts. 1. In general I short when I expect a change in direction of the overall market or a group of stocks within the overall market. 2. Stocks usually establish a trading range and trade within that range at least twice. The upper part of the trading range could be used for shorting. For example, LGTO has traded between 40-48 a couple of times. JDEC between 30-34. TLAB between 56-60......AMZN was trading between 80-120 until this past earnings report.............Sometimes these trading ranges continue for many months and many rounds and sometimes they are over after only two rounds so you have to be careful. For example, CTXS broke through its 72-76 range after only two tries(I think) and that makes sense since the stock was trading strongly above its 50/200 dma. In general, if the fundamentals of a stock is still sound and its correction was market-related, it breaks through it trading range after the 2nd or 3rd try especially if the market is strong. 3. Stocks that move the last and the least are also good shorts when there is a short-term pullback. For example, AOL and AMZN were certainly laggards last Monday when the net stocks started moving in the morning. AOL and AMZN pulled back quickly once the nets corrected last week. The same can be said about LSCC as compared to XLNX or ALTR. 4. You can short a stock based on bad news that hits the sector or another stock within its sector. However, you have to know about the fundamentals of the group and the stocks within the group to succeed. For example, DELL didn't pull down IBM or HWP on Friday(top 5 PC sellers). But a few days ago CPQ's announcement of going direct and CPU's earnings pulled down DELL, BBY, and CDWC. 5. Stocks that react poorly after earnings announcement or to bad news are good shorts over and over. I have mentioned several stocks in the past. SAVLY reacted poorly(in the low 50s) after its earnings was announced two quarters ago and a month later dropped to low 30s and then 20s...LHSPF is a stock that has been acting poorly recently. 6. A Fundamental short is mostly identified after it has already lost 30-70% of its value in a very short period of time. It could take another six months or longer for it to loose another +50% of its value. These stocks are good for those who are patient and in touch with the fundamentals of the company. I cannot think of anything else right now but if I did, I let you know. Clint