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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: TWICK who wrote (41510)	5/22/1999 8:10:00 PM
From: kendall harmon	Respond to of 120523

ACAI is an excellent bounce candidate for Monday. I know this thread is primarily for earnings plays, but "reverse" earnings plays like bouncers are also good ways to trade. A Yahoo poster said "the selling might not be justified, however a dead cat bounce usually ends the day with an uptrend..." but the key phrase is "usually." People such as myself and others who watch these kinds of sell offs like hawks know how to distinguish an opportunity from a masquerading briar patch. (1) You look for a good basic company. ACAI qualifies. As has already been pointed out, this company is featured in the latest business week as a top 100 fast grower. The analyst from bt alex brown likes the stock longer term. They have a deal with United that lasts until 2009 which is very positive. (2) You look for value. It is certainly here in spades, in terms of both P/e and price/sales. (3) You look for whether there is a disproportion between the news and the reaction. The news Friday was guidance from the company that earnings will be some 14-15% lower, but the stock was down 30%, and that was just Friday. (4) You look for a volume spike--this is as important and at times more important than price. TRL is a recent example--it ended with nearly no bounce but on huge volume the day it sold off. (5) You look for a good short ratio--and ACAI has one of over 4. (6) You look for analyst' sense that this is an overreaction--and the Merill Lynch said exactly that (already posted, and yes I know 6 is the least important, that is why it is last). I look for a bounce to between 16 1/2 and 17 in the first half an hour on Monday.