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Ask The Trader
Monday, August 07, 2000

Practice Brings Confidence

Imagine a professional place kicker being called into the game with just seconds left on the clock. His team is down by two points after a hard fought three-hour game. With the weight of his team's victory in mind, combined with 70,000 opposing fans, the kicker effortlessly kicks the ball through the goal post.

So, what's this little vignette have to do with trading? The professional athlete, like the professional trader, must be able to control his/her emotions, despite a stressful situation.

The confidence to trade effortlessly requires practice and development. With that said, its important for each of us to understand our trading tools and know when and when not to follow them.

Needless to say, this takes work!

To the charts!

Cisco has really stayed in a rolling pattern the last couple of months and my long position has done nothing. My question is do you see the stock signaling a run in the next week or two. (DJ)

That's a good question. We can see that there is definite support and resistance within its current range (refer to chart). To get above its current resistance, CSCO may need consistent performance of the NASDAQ to re-gain its uptrend. However, the real question may be answered when CSCO reports earnings tomorrow.

Looking at aud (automatic data processing) I was wondering what thoughts you might have about its recent upmove? Actually I'm wondering if you think the recent run can take on a greater significance.

AUD is a stock we've played from time to time, mostly in an uptrend. However, even with the short-term trend going down, we can still make a case for some interesting plays. Refer to the chart for potential support and resistance zones. On the fundamental side, the company's recent sell-off from June's high may have to do with seasonal selling after tax season, since the company generates a large percentage of its revenues from tax filing.

My question is on sbc, I've followed it for a while and have played it long and short it on numerous occasions and had pretty good success. The macd and stochastic's have been right on! With the long distance market struggling it seems to be in a pretty weak situation.. Your thoughts would be appreciated - cindy

When a stock stays within a trading range for a while there tends to be many clear signals generated by the oscillators. Although this can be extremely profitable in the short term, the stock will eventually change its rhythm. With that said, it's important to keep an open mind about the potential for pattern alternation, as a shift in trend will most certainly occur. As for the long distance market being weak, I've had my own long-distance charges reduced several times over the last couple of years, which doesn't bode well for the long-distance carriers

Good Luck!
Michael Fairbourn
Research Analyst

This column is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The Ask the Trader picks are not to be considered a recommendation of any stock or option but an information resource to aid the investor in making an informed decision regarding stock trading. It is possible at this or some subsequent date, the editor and staff of The Newsletter may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable, but is not guaranteed as to its accuracy.


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