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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Pruguy who wrote (5323)	11/24/1998 12:46:00 AM
From: FNS	Respond to of 8358

Hi Pruguy: Let me restate my opinion that resistance on CS (IMO) has been and still is between 12-16! And, yes, I see where you're coming from when you mentioned the 17-17.5 area, but in reality, it AIN'T there...only on the P & F Chart would you see a high pole at 17 during the 1st week of Feb/98, I believe, and closing for the week at 16 -- and it hasn't been there since... During the 1st week of Dec/97 CS broke down from 23+ to close at 15 1/2. Using weekly graphs (and keeping it simple), the 1Q98 ranged from 14-16, the 2Q98 from 14-16, and in the 3Q98 CS broke 12 to close in the 7+ range and then rallied to 10 1/2 pulling back to weekly close of around 8 5/8....and has since had WEEKLY closings of higher HIGHS and higher LOWS! From a P & F perspective there is a 17 high pole out there so a major bull would not come into play till 17 1/2 is hit... FROM my perspective, and I'm no brain surgeon, should CS close at 16 1/2 or higher the incidental 17 number will soon evaporate! So, in summary, we've pushed through the 12-14 2Q98 resistance and working on the 1Q98 resistance of 14-16...and, further, should the stock break out to 17-18 things would be normal to get a 50% pullback, which could be quite healthy to support a more sustained move up! Additionally, I believe Dorsey's P & F charting and money management calls for dumping a 1/4 - 1/3 of your position for each 1/4-1/3 move up of the total target...but I believe O'Neil uses a more 'doubling up' money management technique. And both of these guys are smart. (Forgot a lot of this good stuff, but if you like 'blackjack', it makes more sense to double up - especially when the trend is in your favor. Thanks for your comments, Pruguy. You are correct about the high point of 17 from a P F perspective. I base my analysis on daily and weekly CLOSING numbers...and consider volume as necessary and possibilities of false breakouts. Remember, the charts are not magic and ..... and sometimes it pays to be a contrarion. Here's something from Dorsey report that may be of interest: "Cabletron Systems Inc ($13.563) broke a double top at $13.50. This is the second buy signal off the bottom and momentum is positive. CS is only for aggressive traders as RS remains negative. Use a stop of 11, a double bottom break." As for the stop, "sta' attento" (be careful) cause while the DOW and NAZ have skyrocketed, this rocket can explode anytime and come sizzling down...internets gone crazy and telecoms are real hot...difference between fiction and reality is transparent -- today everyone yelling "YAHOO" or "AOL"...tomorrow -- "ouch"! ciao, FNS