Putting On Some Shorts

October 6, 2000
Dave Baker

As the weakness continues, and California remains sunny, I think
it’s time to get some new shorts. Let’s see what we have in the closet.

Regarding the intraday market action, the up opening followed by the intraday
descent is characteristic of a bear market, which is what I think that we are in
right now. Could it turn any day? Absolutely. In fact, most people are hoping
that it will turn around sometime soon. What is most important here is that we
are aware of the situation and that we trade it as it is. The gist of the
situation is that the market opens and closes in different directions.

Recent IPOs have been
having trouble staying above water. Looking at Cosine
(
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PowerRating), it has taken
out another near-term support level as hit heads lower in the descending channel
that it’s been travelling in. If it closes another new low on Friday, watch for a
continuation move on Monday to offer a short opportunity.

When looking for entry and exit points, you may also want to
consider the channel trendlines, which may provide support and resistance levels.

RCN Corporation
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PowerRating) on the lower-priced list also took out near-term
support today. The volume is on track to be double the average, which may mean
that there is some meat to this move. Of course, this is a lower-priced stock,
so we cannot expect the same types of moves.Â

Net2Phone
(
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PowerRating) is one that is still poised to take out its lows. It has
been consolidating near support that was set back in April. Set your alerts near
the low of the range so that we can be ready for a break down. The volume has
been quite light during the range-bound time. When it moves out of the range, we
will look for volume to confirm the move.Â