Getting Personal

September 1, 2000
Dave Baker

Several readers have written to me with questions this week that I would like
to respond to.Â

The first question asks what kind of gains I look for on my daytrades. On
each position, I look to lock in 1 to 5 point gains. My concern is with how
many points I net each week, not with percentage return. To me, making 5 points
on a $30 stock is just as good as making 5 points on a $100 stock.

The second question that I have received several times is in regards to
position size. This is something that I will go into in more detail at the
Trading Markets 2k show, but for now I will say that I like to trade in blocks
of 300 to 1000 shares. I usually start with a 400 to 500 share position and
consider adding based on the strength of the move.

On to the markets.

Have you been watching the biotechs? Last I heard, the Street was saying that
it was the great speculative move of the last century, and that they would never
return.Â

Tech Data
(
TECD |
Quote |
Chart |
News |
PowerRating) was
one of the strong stocks through the April decline. The stock bounced off the
50-day MA on virtually every pullback, it was simply beautiful. When it finally
broke out of its uptrending channel and hit a new high, it quickly pulled back
to the 50-day MA. It’s as if this MA has some magnetic power over the stock. It
returns to the list today because it is breaking out once again. If it is able
to hold this new high, watch for a continuation move on Tuesday. If it retraces,
look for a close above resistance.

Jabil Circuits
(
JBL |
Quote |
Chart |
News |
PowerRating) has formed a high-level
cup-with-handle. I have not seen one of these patterns in quite a while, so it’s
quite reassuring to see one. If JBL can close above the lip of the handle, we
will watch for a follow through move on Tuesday. Set your alerts near the
intraday high from Friday. Ideally, the breakout will be on strong volume,
despite the overall market volume.

For you low-level traders out there, Cirrus Logic
(
CRUS |
Quote |
Chart |
News |
PowerRating) broke out from a low-level formation on Thursday. While it headed a
bit higher on Friday, it has now retraced. This retracement may be nothing more
than a minor pause before a bigger move. Look for Friday’s pullback to be no
greater than 50% of the move from Thursday. For the play to remain valid, it
should also close above the breakout level highlighted below.