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OTC Journal Members:
It is now 10:00 AM Pacific time and
the NASDAQ is down 100 points to about 1950. As mentioned in our
weekend edition, we felt the market would sell off early, following through
from Friday's big drop.
Our friends at the Swingwire (www.swingwire.com)
were hoping to see a rebound after the first half hour of trading. This
is not happening. Virtually all technical analysis is out the window at
this time, and it is very tough to call a bottom in technology stocks.
The next FOMC meeting is one week
from tomorrow, and we believe there will be a relief rally beginning by
Wednesday and running into the meeting. Once the FED announces how much
they will lower interest rates the market will sell off regardless of the
FED's actions. Buy on Rumor Sell on News will be the mode of operation
leading into the FED meeting.
Once the initial surge of selling
ended this morning all selling pressure dissipated. Stocks are not moving
up because buyers are on strike. However, chip stocks are beginning to
improve, and this was the group that was selling off the worst in January.
After struggling with a decision
we're moving forward with two trading alerts. The success of these ideas
is predicated on the view that there will be a relief rally this week.
We called in correctly back on February 28th and gave our members two money
makers with Nokia (NYSE: NOK) and JDS Uniphase (NASDAQ: JDSU).
However, all support levels in the NASDAQ have been violated, and we would
not recommend risking more than a point or two on either of these ideas.
If you're willing to take a shot, make your trade then hope the NASDAQ
If we call it right take your profits
after one or two trading days. If we have called it wrong, sell down a
point or two and get out.
Oracle has replaced Microsoft
as the bellwether leader in the software arena. Microsoft ruled
the world when the growth was in PC's. Now that growth is stronger in the
Networking sector, Oracle has become the leading indicator of the
health of the software sector.
The Stochastic chart on the bottom
shows are quadruple bottom at the zero level, which is considered a low
risk entry point in the stock.
Here are our thoughts on the stock:
-Buy at the current market- $15.50 to
-Target Price in an Improving Market-
$18 (10 day moving average should be resistance).
-Stop Loss- $14.50 or whatever your
risk tolerance is.
Group (NASDAQ: ARTG)
Art Group is one of the leading
software companies in the rapidly growing B to B software networking space.
The company has not warned of declining sales and earnings, but the stock
has been hammered in the last two weeks along with the rest of their peers.
The last relief rally took this stock up 15 points.
Here are our thoughts on the Stocks
-Buy at current market- $17.50 to $18.
-Target Price- 10 day moving average
-Stop Loss- 1 to 2 points, or wherever
your risk tolerance is.
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