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All,
Another good week. Looking at the indices, I'm even more
convinced that the correction is over - for a while at least <G>.
With the three new positions I added this week, I now have long
positions in DELL, EGGS, ERICY, HBOC, SPF, and U stocks and LEAP calls
on CPQ. That's put quite a dent in my cash, but I still have room for
one more position. With the NASDAQ coming back alive, I thought it
would be a good time to look at the semiconductor suppliers. I
decided on Mitel Corporation (MLT) that manufactures and distributes
business electronic telecommunications systems and semiconductors.
MLT at 14.687 is in a short, intermediate, and long term up
trend. It hit an all time high of 16 1/2 on 5/22/98 before beginning
a short term pull back to a low of 12 3/4 on 6/16/98. From there it
moved up and broke out of its short term down trend channel Thursday
on good volume and then gave a MS Tema PDI-MDI buy signal Friday.
After the breakout, I constructed a very Short Term Up Trend Channel
(STUTC) with the top at 16 1/4 and the bottom at 13 1/2. The
fundamentals are good with a price/sales of 2.21, ROE of 22.8%,
debt/equity of 0.16, 12% insider ownership, annual revenue growth of
over 20%, and annual earnings growth over 100%. It looks like we will
move up from here to test the 16 1/2 high. I'm anticipating that it
will break through that high. I'll construct a steeper intermediate
term up trend channel when it does to use for a target. For now, I'll
take a long position at Monday's open and set my stop just under the
STUTC at 12 3/4.
I'll send a MLT.GIF chart to everyone on the chart email list.
If you're not on the list, and want on, just yell.
Jim
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