Updating the Game Plan

Print 

Tuesday's month-end closes provided new inputs to my models, which resulted in new monthly value levels, pivots and risky levels. Remember, a value level is a price at which buying should occur on weakness; a risky level is a price at which selling should occur on strength. A pivot is a value or risky level that was violated and has a high probability of being tested again in its time horizon as a magnet. So in this alert I am providing a complete list of all the trading strategies currently in play for the members of the model portfolio.

As for the technology sector, note that technology ended January only 2.9% undervalued, with computer manufacturers 9.1% undervalued, semiconductors 3.1% undervalued and software 4.5% undervalued. With valuations squeezed out of the sector, I will be seeking new portfolio members in industry segments more on the edge of pure technology. My latest screen of the Nasdaq 100 turned up no stocks rated a strong buy and only one buy-rated stock, according to ValuEngine. That buy-rated stock is Ciena (CIEN:Nasdaq), which is a $4 stock trading near a 52-week high. So it is not the type of stock I want to add to the model portfolio.

Here are the revised trading strategies:

-- Altera (ALTR:Nasdaq): Add 200 shares to the model portfolio on weakness to my quarterly value level at $17.04. Or, reduce this position by 200 shares on strength to my quarterly risky level at $21.68.

-- Click Commerce (CKCM:Nasdaq): Add 170 shares to the model portfolio on weakness to my quarterly value level at $23.53. Or, remove this position on strength to my monthly risky level at $35.75.

-- Cisco (CSCO:Nasdaq): Add 175 shares to the model portfolio on weakness to my monthly value level at $16.83. Or, reduce this position by 175 shares on strength to my quarterly risky level at $20.61.

-- Dell (DELL:Nasdaq): Add 150 shares to the model portfolio on weakness to my monthly value level at $26.81. Or, remove this position by 150 shares on strength to my monthly risky level at $34.27.

-- EMC (EMC:NYSE): Add 300 shares to the model portfolio on weakness to my monthly value level at $12.94. Or, reduce this position by 300 shares on strength to my monthly pivot at $14.03.

-- Intel (INTC:Nasdaq): Add 150 shares to the model portfolio on weakness to my semiannual value level at $19.66. Or, reduce this position by 150 shares on strength to my monthly risky level at $26.90.

-- Juniper Networks (JNPR:Nasdaq): Reduce this position by 200 shares on strength to my monthly pivot at $18.81.

-- Powerwave Tech (PWAV:Nasdaq): Add 300 shares to the model portfolio on weakness to my quarterly value level at $11.45. Or, remove this position on strength to my monthly pivot at $16.16.

-- SigmaTel (SGTL:Nasdaq): Add 200 shares to the model portfolio on weakness to my monthly value level at $9.27. Or, reduce this position by 200 shares on strength to the Dec. 2 high at $16.17.

-- Symantec (SYMC:Nasdaq): Reduce this position by 225 shares on strength to my annual pivot at $21.85.

-- AT&T (T:NYSE): Add 170 shares to the model portfolio on weakness to my monthly value level at $24.45.

-- Tellabs (TLAB:Nasdaq) Add 350 shares to the model portfolio on weakness to my quarterly pivot at $11.19.

-- Time Warner (TWX:NYSE): Reduce this position by 225 shares on strength to my quarterly risky level at $19.96.

-- VeriSign (VRSN:Nasdaq): Remove this position from the model portfolio on strength to the 200-day simple moving average at $24.95, or on a sell stop below my monthly pivot at $22.88.

-- Xilinx (XLNX:Nasdaq): Add 150 shares to the model portfolio on weakness to my monthly value level at $26.68.

-- XM Satellite (XMSR:Nasdaq): Remove this position from the model portfolio on strength to my monthly pivot at $29.71. I still have semiannual value levels at $26.34 and $26.16, which we used yesterday to add shares to the model portfolio. The next major level is the 200-week simple moving average at $20.70 at which I may consider adding to this position on weakness.

Short Positions

-- Nasdaq 100 Shares (QQQQ:Nasdaq): Add 100 shares to this short position on strength to my monthly risky level at $44.00.

-- Semiconductor HOLDRs (SMH:Amex): Add 200 shares to this short position on strength to my monthly risky level at $41.23.

Regards,

Richard Suttmeier

Recent Actions

Weekly Roundups