Watch For Slim Jims

August 17, 2000
Kevin Haggerty

The
two-day run came to an end yesterday as
there was only entry in a few of the stocks on a continuation basis. How about
Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating)?Â ls there an analyst in the house? With the new
SEC disclosure rules approaching, and analytical implosions like Proctor &
Gamble
(
PG |
Quote |
Chart |
News |
PowerRating), Bristol-Myers
(
BMY |
Quote |
Chart |
News |
PowerRating) and many others, the ranks of brokerage
analysts will thin. ADI has advanced from an intraday low of 56 1/16 just ten
days ago to a high of 94 5/8 yesterday! I wonder what the Salomon Smith Barney analyst is thinking about now?

There are four major mutual
funds that own over 25% of ADI, and during the quarter ended June 30, three of
them were net sellers and one was a large net buyer. It is good to review some
of your major stocks by checking the levels and patterns of the reporting
quarter that the Generals were net buyers and sellers. You can start with ADI by
going to www.stockpoint.com, get a chart
of ADI, then click on Institutional Holdings to see what I am talking about.

The Nasdaq 100
(
NDX |
Quote |
Chart |
News |
PowerRating)
has been dead center, closing the last three days at 3720, 3723 and 3721. As
everyone is looking for confirmation of this rally, and they wait for the NDX to
make a new closing high above 3780. Yesterday it hit 3791, but of course closed
at 3721. This could happen soon,
as the QQQs closed at their highest level in 14 days. The S&P 500 hit
resistance at the 1495 level, and immediately backed off, closing at 1479.84.

The New York Stock Exchange
volume yesterday was the most this week at 933 million, with a volume ratio of
48. Breadth was slightly positive, as the Generals pushed on the day. They still
chase the semis and the herd attacked ADI, going after it at 90 and above, just
like the misinformed retail chases splits like they did yesterday on Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating). CIEN traded up to 173 and change in the early Instinet, only to
close 10 points lower at 163 1/4.Â

ADI will have a nice
air-pocket short set up shortly, as the herd switches pastures.

Tomorrow is options
expiration, so who knows what we will get today and tomorrow? I urge you to
scroll your five-minute charts for Slim Jims both days, to catch any expiration
or FOMC action.

face=”arial, helvetica”>(September Futures)
Fair Value	size=2>Buy	size=2>Sell
6.90	8.00	5.80

Pattern
Setups

There are not many, other than the
tired semis (which you will have to include in your trading plan for any
continuation entries in case the herd hasn’t stopped feeding, which they will
soon).Â

Two stocks as examples are: Juniper
(
JNPR |
Quote |
Chart |
News |
PowerRating), which closed in a Slim Jim between all three EMAs, the 20-, 60- and
260- on your five-minute charts. It is bounded by the 60-EMA at 166.52 and the
bottom by the 260-EMA at 165.85. The stock closed at 166 5/16. Above the 60-EMA
it clears all three EMAs and below the 260, it drops below all three. Also,
(
SDLI |
Quote |
Chart |
News |
PowerRating). This stock gets going on the long side above 377, and it is an
air-pocket short below the 60 at 373.97. The 260 is down at 368.50.

I only bring these two stocks to your
attention to point out the exercise you go through to find setups when you don’t
get many from the daily charts. When you do get a good daily setup,
confirmed by breakout of an intraday pattern on the five-minute charts, it is
usually when you will have your best
day.Â Â Â Â Â Â Â

In Instinet right now, both stocks
have moved above the upper boundaries, but you might catch a second-entry trade.