SHREVEPORT, La., Oct. 11, 2004 (PRIMEZONE) -- Stock-Letter-Daily.Com (http://www.stock-letter-daily.com -- an affiliate site of StockPickReport, the web's only non-mainstream stock rating service), rates JDS Uniphase, Research In Motion Ltd, Brocade Communications Systems Inc. and Tellabs Inc.
STOCKPICKREPORT RATINGS: JDS Uniphase (Nasdaq:JDSU) -- SELL http://www.stock-letter-daily.com/rating.asp?format=single&ticker=JDSU Research In Motion Ltd (Nasdaq:RIMM) -- SELL http://www.stock-letter-daily.com/rating.asp?format=single&ticker=RIMM Brocade Communications Systems Inc. (Nasdaq:BRCD) -- WEAK BUY http://www.stock-letter-daily.com/rating.asp?format=single&ticker=BRCD Tellabs Inc. (Nasdaq:TLAB) -- BUY http://www.stock-letter-daily.com/rating.asp?format=single&ticker=TLAB
STOCK COMMENTARY:
Monday, October 11, 2004StockPickReport Commentary
"Targets, Stop-Losses, and the S&P"
Last week we said that if the S&P closed over 1130 we'd buy. Our contention was that the trendline since January (to the downside) was an important trend. The upside breakout was important, but we added that a break back down through that trendline would also be noteworthy.
Like 1130 was important on the way up, we think 1100 is a key position on the way down. In other words, if the S&P cannot continue to close above 1100 at this point, we see more significant downside ahead.
One trader asked recently, "You talk about targets and stop/losses a lot. What do they mean, and how can I use them effectively?" That's a wonderful question.
Our contention is that if you break out of a long-term trendline and then break back down through it, you must NOT fall below the most-recent lows below that trendline. The psychological aspect of a move down like that would be significant. Stocks could experience a serious and sharp drop from there.
So, the 1100 number is critical. We believe that if the S&P cannot remain above that mark, more downside lies ahead. That downside means that more stocks than not will trade DOWN. So, it would be wise, in our opinion, to watch 1100 and use it as a stop/loss trigger for stocks you might hold.
As for upside potential, the longer the S&P remains above that 1100 mark, the stronger the recovery from current levels will be, we believe.
The benefit of this concept is that the market does not have to go up for you to "win". If the markets trade higher from here, FANTASTIC -- stocks you hold should do fine. If the market trades flat (and above 1100 for the S&P), again, your stocks should be fine. But, if the market trades down (and the S&P drops below 1100), you'll most likely wish you'd employed a simple stop/loss on your stocks.
The bottom line is that using stop/losses should remove all fear from your trading. Regardless of WHAT the market does short-term, if you use diligent stop/losses, you should consistently remain ahead of the game.
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If the links to our ratings above do not work, please use these:
JDS Uniphase (Nasdaq:JDSU) -- SELL http://www.stockpickreport.com/rating.php?sym=JDSU Research In Motion Ltd (Nasdaq:RIMM) -- SELL http://www.stockpickreport.com/rating.php?sym=RIMM Brocade Communications Systems Inc. (Nasdaq:BRCD) -- WEAK BUY http://www.stockpickreport.com/rating.php?sym=BRCD Tellabs Inc. (Nasdaq:TLAB) -- BUY http://www.stockpickreport.com/rating.php?sym=TLAB