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  • June 29, 2000
  • Dave Baker

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The techs are still stuck in a trading range.
Until I see some sort of established trend, I’m going to stick with the same
trading strategies that we’ve been using for the last few months. Let’s take a
quick look at the current short-term strategy:

  •    Use less aggressive
    entry points

  •    Limit speculation by
    waiting for continuations

  •    Use smaller position
    sizes on swing trades (daytraders can stick with their normal size)

  •    Don’t bet against the
    trend

  •    Lock in profits earlier
    to avoid large drawdowns

  •    Watch for reversals in
    the first hour and heavier trading in the last hour

  •    Use lunch time lulls to
    look for intraday setups

Today’s Watchlist:
(
CS |
Quote |
Chart |
News |
PowerRating),
(
HYSQ |
Quote |
Chart |
News |
PowerRating),
(
NGEN |
Quote |
Chart |
News |
PowerRating),
(
MTNT |
Quote |
Chart |
News |
PowerRating)

Cabletron Systems
(
CS |
Quote |
Chart |
News |
PowerRating) is still
stuck in a low-level trading range. On Thursday it began to approach the top of
the range for a third time. Since we haven’t set any alerts on Cabletron yet,
we should prepare for a possible move. Set your alerts just over 25 and under
20. When it makes a move outside of the trading range we’ll be ready. Because
Cabletron is a lower priced stock, remember to expect smaller moves. 

Hyseq
(
HYSQ |
Quote |
Chart |
News |
PowerRating) may be ready for a low-level breakout. Set
your alerts near 47 and wait for the move. Should a breakout occur, we’ll watch
for a continuation move. If you open a position, take note the March 25-26
resistance area. A break below the 50-day MA would invalidate this pattern for
the near-term.

Nanogen
(
NGEN |
Quote |
Chart |
News |
PowerRating) broke out of a low-level consolidation on
Wednesday. At the moment, we’re waiting for a continuation move. Set your alerts
at 40 1/8. If you open a position, watch for resistance from 46 7/8 to 48. In a
breakout situation, swing traders may be able to catch a greater than 10% move.
If you use it for a daytrade, you may want to consider on strategy that I use,
which is to sell 1/2 my position on a 4 point gain (or at least raise my stop to
keep the 4 point gain). The conservative trader will wait for a move above 50 before opening any
positions. If it reaches this point, I’ll bring it back to the Watchlist for
another play.

I added Motient
(
MTNT |
Quote |
Chart |
News |
PowerRating) to the Watchlist earlier in the week
so that we could be prepared for a continuation move. On Thursday we saw an
intraday move above the breakout day’s intraday high. If you are considering
acting on this continuation, you may want to draw a trendline from the June 25
low to help find an initial stop area.

Until Friday, 

Dave Baker