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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (37654)	11/27/1998 3:38:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

Hi NW, I really don't know what the kind of TA I use is called. I've only been trading/investing for a few years and just got into TA last year after I bought CPQ at 39 (Do I get some kind of booby prize?). I recently bought ‘Technical Analysis of Stock Trends' by Edwards and Magee - Christmas present to myself. It's supposed to be the best book on TA. Looks formidable. I'll let you know what type I use after I read the book. For now I call it the "Makes a lotta sense to me" method and is largely based on Bill O'Neill's (Michael Dell's uncle <gggg>) philosophy cause that "makes a lotta . . . ." I followed the stocks that should've moved using his methods and his track record is pretty damn good. If you're not familiar, he uses simple bar charts to determine when to buy a stock. It's based on the theory that the best stocks move in a general uptrend and periodically pause/consolidate/base before going on to make new highs. The consolidation phase is where buyers and sellers duke it out over what the stock is worth. You should buy (or sell ) when the stock breaks out of the base structure on heavy volume because that means a decision has been made as to the stock's direction for probably at least the next 20%. It's even better if the stock is making a new high because there is no overhead selling pressure. I've had very good success using this TA method. Sure, sometimes the breakouts fail so you have to use good mental sell stops. A six month chart of DELL movement is a very good example. Boy, I sure do agree with Dorsey Wright on DELL here. DELL's previous breakout point to the upside was 60. In the last 2 weeks the lowest it hit was around 61. People who bought on the breakout from 60 will have their mental stops in somewhere between 60-61 if they haven't already sold. If DELL drops below 61, LOOK OUT BELOW. 61 is also right on the 50 day moving average. This is big voodoo. As I said, I use TA to decide when to buy, but not what to buy. Where I disagree with O'Neill is on the calculation of RS and Accumulation/Distribution, but that's a whole other area and I've rambled on too much already. I also have some big gripes with his paper IBD if you haven't already guessed. One of his 7 factors that control the movement of stock prices is News and I find IBD's idea of what's news very subjective. They would put "Dell Lowers Prices on Notebooks by 1% in Afghanistan" over "Saddam Bombs DC". Sorry to go on and on. Would be interested in your thoughts. K PS: If anybody else out there uses another form of TA - Bollinger Bands or somethin' - is it telling you the same thing about DELL?