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Ask The Trader
Monday, August 14, 2000

What Technical Methods are Best?

Technical analysis is a very diversified field of study and, not surprisingly, full of several different trading methodologies. As traders, I'm sure that we all see a number of new concepts that promise greater returns and quicker profits. Yet, we tend to gravitate to the simpler and more revealing approaches, instead of the latest and perhaps more complex methods. We've found that adding complexity to trading tends more to cloud judgement more than it does to answer the important questions of making a profitable trade.

By using simple trading approaches, we feel that basic questions about the trend direction and/or changes at certain price levels can be better answered. We try to answer these essential questions by employing support and resistance, volume and a few trendlines to help make our plays profitable.

Now, off to the charts!


Just wondering what is your feeling for MVSN, this company has just reported a great second quarter. It has already split once this year and once in 1999.
Thanks

You've chosen an interesting company here. Macrovision (MVSN) designs and markets video security technologies that provide copy protection and video scrambling for motion pictures. It seems that all of the recent publicity over copy protection (think Napster) has helped MVSN. The big concern here is that video will be the next form of community sharing, which is benefiting MVSN investors.


Looking at ADCT (ADC Telecommunications), I was wondering if you can chart it out and what thoughts you might have about its recent up and down swings? Last Friday ADCT double topped and on Monday it appeared to break through resistance at 44. The company is supposed to announce earnings on Aug. 17th. Your thoughts would be appreciated - Gary

It now looks like initial resistance should come at the short- term downtrend ($43). A break through this level on good volume, could be your signal for an earnings run (8/17). As for the recent ups and down, back in June and into the first part of July you'll notice a long congestion range. It appears that ADCT is currently rolling in between this range, with the upper end representing overbought and the lower end showing oversold. Of course, use you're other indicators to confirm entries/exits. With this in mind, resistance at $50 could be strong.


My friend up north says go to cash because a downward trend is heading our way. I purchased 500 shares of INTZ at 9.50 a share. He says I should be able to buy back the co. at even a better price. He has a subscription to gilders letter. Also a couple of investment friends. Any advice would be helpful.

Intrusion.com (INTZ) designs and markets computer networking products for local area networks (LANS). We don't have a lot of chart history on this new issue, but it looks like another interesting high tech play. Generally, we look for stocks that have a little more history/information before we open a play, but there are some interesting short-term indications we pointed out on the chart. Most notably, your purchase at $9.50 is near a recent support base at $9.00.

Good Luck!

Mike Fairbourn
Research Analyst

 


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