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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (1256)	11/25/1998 5:16:00 AM
From: Bernie Kaplan	Read Replies (2) \| Respond to of 4916

Technical analysis, whether applied to an investment in a sector fund or an individual stock, can never be used exclusively without a modicum of consideration given to fundamental factors, market conditions, etc. What TA does, however, is provide you with a picture of what is going on in the broader market, as well as in its many underlying sectors. It is thus a reflection of the combined decisions of millions of investors. All that TA can do, however, is show you what event appears most likely to occur in the short term. It is in no way a predictor as far as long term events are concerned, although charting can certainly direct us to longer term indicators where price support and resistance levels are concerned. Because of this, a sector fund investor who employs technical analysis is not particularly concerned with the overall direction of the market except to get a sense of the characteristics of the general investing arena. Right now, for example, I am holding a number of Selects that were purchased in early October, and their gains to date have been far better than usual. At this point, I don't care at all if the market goes higher or reverses direction. If it keeps heading higher, I will continue to reap the gains that come. If it pulls back far enough to generate sell signals, I will gladly lock in my profits and wait for the next buying opportunities in the best sectors at the time. For those just getting started in TA, however, or who want a broader understanding of its many components and their meanings and applications, I would recommend buying "The Visual Investor" by John Murphy. It is a splendid, easy to read and understand book that will help you tremendously. Happy Thanksgiving to All. Bernie Kaplan