|
PureBytes Links
Trading Reference Links
|
All,
A much better week in the market then last week even if I was
stopped out of my CHB position <G>. I even think I'm completely back
up with my computer. Everything seems to be working. Also, I've been
playing with my MetaStock System tests again as you will notice when
you see this weeks chart. I'm developing a system test based on
directional movement that looks promising. I want to play with it
more during the week, then I'll be glad to send the revised tests to
anyone who wants a copy. If you want it, yell and I'll place your
name on a MSTest email list. Then anytime I change them again, I'll
just email them out. The reason for doing this is to get your
thoughts and ideas, so please don't be bashful about commenting. I
have also been asked to explain why I've structured each test the way
I have, so I'm also going to start doing that when I have time.
Now back to the market. I was very disappointed when I was
stopped out of Bear Sterns a week ago since I think the brokers will
continue to coin money as long as the volume stays up. I think that
the dollars will continue to come in from the retirement plans and
mutual funds. That will keep the Bull roaring and the volume up.
Even if more of the volume goes to Bond funds, that still puts money
in the brokers pockets. Therefore, I concentrated on the brokers and
decided on E*Trade Group (EGRP) for my pick this week.
EGRP at 21.812 is in a Long Term Up Trend Channel (LTUTC) with
the top at 52 1/2 and the bottom at 18 3/8. It peaked at 47 5/8 in
October 97 and then fell to a low of 17 3/8 on the bottom of the LTUTC
in late December 97. It broke out of that short term down trend
channel in late December and rose to the 25 level in early January 98.
Then it pulled back and once again bounced off the bottom of the LTUTC
Thursday and then rose on good volume Friday. The smoothed
Directional Movement turned positive last week and the normalized,
smoothed LinRegSlope (S/C) turned positive the week before. This
looks like a good entry point with the target just under the top of
LTUTC and the stop just under the bottom of the LTUTC until a good
short term up trend channel forms. The fundamentals are OK except
that price/sales at 5.33 and P/E at 55 are a little higher then I
like. However, I like the ROE at 12%, 23% insider ownership, and the
triple digit revenue and earnings growth. I'll open a position Monday
with the target at 52 and the stop at 17 3/4.
I'll send a EGRP.GIF chart to everyone on the email list. If you
aren't on the list and want a chart, just yell.
Jim
|