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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: TA2K who wrote (9159)	2/6/1999 6:57:00 PM
From: steven d. zapf	Read Replies (1) \| Respond to of 12039

Nicholas, Don't know if this will help, but I have a basic criteria I use before I even put a stock into my data base....... The long term debt cannot exceed 30% of shareholders equity. Also, there should be enough cash on hand to cover short term debt. I also tend to disregard stocks that do not trade at least 50,000 shares per day. These criteria tend to keep alot of the junk stocks out of your database. Offered for what it's worth.... Regards SDZ

To: TA2K who wrote (9159)	2/7/1999 12:40:00 AM
From: Richard Estes	Read Replies (1) \| Respond to of 12039

You may have less risk with increasing earnings if you are a position or a long term investor. Have you ever done a scan to see what stocks are moving now and how they compare over time? Funnymentals don't correlate with price. The market has no fudamental logic. High RS and EPS stocks do move but just as many low eps stocks do. So it depends on who you are, trader or investor. With a program like QP2, you can test your theories. Play with it. I have stopped trying to include funnymentals for short term. If you ever find a measure that works tell me about it.

To: TA2K who wrote (9159)	2/7/1999 9:51:00 AM
From: Robert Graham	Read Replies (2) \| Respond to of 12039

The probability is fairly high that a 'fundamentally standard' stock will continue higher, passing through the above system TA points. Fundamentally 'weaker' stocks, however, are less inclined to continue the ascent, will probably just head-fake up, but then continue on to lower levels. What is the basis for your information? Or are you making all of this up in an attempt to understand the price action of stock? We all have to start somewhere, right? ;) The price action of a stock and its fundamentals are at best tenuously connected. The more true this is when the time frame is very short like yours. Think of fundamentals and the price of a stock connected by a long rubberband. In todays market, make that a very elastic rubber band. There are many reasons why a stock is moving up at a given point in time. But it never directly has to do with fundamentals. Perhaps news events that are of a fundamental nature like analysts upgrades and earnings warnings and earnings reports impact the current price action of a stock. But then you have to take into account the sentiment of those playing the stock and the timeframe they operate in: one day, short term, or longer term. Even more important is determining if the big money is moving in or out of the stock in order to judge the short term respnse of a stock to a news event. Short term trading is in many way a different animal than long term investing where fundamentals can play an important role. Is is not prudent to confuse the two. For your timeframe I would completly ignore fundamentals. If you chose to trade a stock on-and-off over a long period of time, then it may be worthwhile to check to see if the company is in a potential default situation so you know you can always exit your trade before any nasty surprises occur as an unwanted news event. But this is a different issue than what you are attempting to focusing on. industry preference: don't see as important with the particular system that is Play a stock that is in an uptrend that is in a sector which is in an uptrend where the market is also in a longer term uptrend. Analysis of sector and market indices can make this possible. Here is a hint: think relative strength. In this context, focus on the sector that is in an uptrend and showing good relative strength compared to other sectors, and the stock that is performing well compared to others in the market. This is a good indication where the monies are moving to on a day-by-day basis. The IBD RS figures can help here along with its equivalent in particular stock scanning packages. So in the above approaches to identifying trading candidates, industry/sector preference is considered very important. Just my opinion. Any other opinions welcome. Bob Graham PS: I do not know where your use of the term "head fake up" comes from. A head fake is a vert transient event performed by the market maker as a form of very short term price manipulation. This is not how weak stocks move up over a period of time. For that matter, there can be many reasons a fundamentally weak stock moves up, and reasons for even a technically weak stock moves up. Take Amazon for example. I would not call what happened there an all-time record breaking "head fake" that caused a run in the stock of a few hundred points over a period of many weeks. And Amazon IMO is not a fundamentally sound company like most Internet glamour stock.