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Hello out there stock charting fans. A very choppy week we had. The market was up 5% early in the week on a
short covering rally combined with the some real buying on the news of a possible interest rate cut in the
future. Then we had the market retreat fast and give back all of these gains, just prior to the release of the
Starr report. Then after the report was released, the market had a relief rally.
I thought that the give back rally, after the 5% gain was very weak and I think that we may have seen a
potential short term bottom here. I see we have a double bottom here on the transports which have been the
leader here in this market sell off. I also see some double bottoms here on some of the oscillators that I
track. It is these multiple double bottoms that lead me to think we are at a short term bottom.
For now we are trapped between 7350 and about 8170 on the Dow. I do see some very encouraging signs in
the NASDAQ now, and have compiled some nice graphs highlighting these stocks.
I must admit, that I think it’s way to early to enter any stock long at this time, especially with all the averages
having steep descending trend lines that dominate the patterns. However, I did cover all of my short
positions this week and I may be tempted to go long this week. If I do, I’ll be quick to cover if, after a strong
rally to the upper resistant lines, we get a sharp down turn. I do think that for now, most of the easy money is
gone on the short side of things.
This week, I see many new prospects, that could, over the next 6 to 9 months become the next Yahoo!
[YHOO] or the next CMG Information [CMGI] or the next Mindspring [MSPG] or Amazon.Com [AMZN] Many of
the new selections have graphs attached.
WEEKLY STOCK PICKS
Adac Labs (ADAC) - $28

This stock has very heavy volume accumulation spikes that last for a week. Stock is making new highs in a very tough market
environment. Only 17 million shares oat on this stock, and the stock is under owned. Earnings and revenues are ramping up
or expanding if you will, and the group is very strong with most stocks in this group at new highs. Could this Medical
Instrument group be the next leading group in the market?. I think it’s possible.
Arterial Vascular Eng. (AVEI ) - $42

There is no other stock in the stock market right now that has the giant earning increases that this stock has. This stock had
much better than expected earnings in the last quarter. Earnings were .90 vs. .07 which were up 999%. Revenues were up
719% to 181 million. This stock carries a P/E of 24 and is setting up a with a cup and handle. Buy point is at $45 on up to
$50. The wide spread on this one is due to the blow off spike at $48. In the super strong Medical Instrument group. See
attached graph.
Biogen Inc. (BGEN) - $64

This stock has just left an 8 week base and left in a hurry. Stock has massive volume for the past 8 weeks and is rated an "A"
for accumulation. This of course is as the market is under massive distribution. Stock is also under owned, so there is plenty
of room for buying by the institutions.This stock is at the upper end of the buying zone, so I would pick up some shares here
on a pull back to $62 or $63 if you can average in,. Could Biotech’s replace the Internets as a strong group with little or no
earnings?.
Concord Communications (CCRD) - $38

This stock made my potential new leader list just before the market sell off some 6 weeks ago. The stock tested the 200 day
moving average line the a market sell off and bounced back strong. The stock has just broken into new highs here, but is a
little extended. See attached graph.
Lason Inc. (LSON) - $48

Stock is growing like a weed. Revenues up 128% to 62 million. Earnings are up only 41% to .31. Stock is one of the best
looking inverted head and shoulders that I have seen in awhile. The buy point is coming up soon. See attached graph to nd
it.
Minimed Inc. (MNMD) - $62

This stock has all of the best qualities that I would like to see in a stock. This would include a break away gap, heavy volume
and base on a base. I would consider picking up some shares here at this price. See attached graph.
MIPS Technologies Inc. (MIPS) - $20

This stock is a recent IPO and looks very good in this market. Stock is .50 from making a new high. Volume has dried up and I
would like to see it pick up as the stock goes into new highs. Daily average volume is 344,000 and right now the stock is
going up on almost no volume. Could this stock be all tied up by the big boys? Company is in the Electronic Semiconductor
Equipment group. Revenues are weak, but earnings are now coming through. I would prefer that this stock rest a few more
weeks ,before I would buy It. Then your buy point is as the stock goes into new highs.
New Era of Networks Inc. (NEON) - $42

Stock has been a surprise, as it didn’t sell off as I thought it would during the market break. In fact, it shot ahead to make
new highs during this past week. Earnings are up 250% to .12 and revenues are up 140% to 11.5 million. This group, is nearly
as strong as the Medical Instrument group. Again, most stocks in this group are making new highs. You may remember this
group as I highlighted it prior to the market sell off. This stock is be one of my favorites as is MNMD. See attached graph.
Network Appliance Inc. (NTAP) - $51

This stock is at new highs and ready to go any day. Earnings are up 58% to .19 and revenues are up 72% to 57 million. I
would consider buying some here as it breaks into new highs at $51 to $53. Do not over pay here or on any stock. See
attached graph.
Qlogic Corp. (QLGC) - $56

This stock has many good thing going for it. A huge break away gap on the release of earnings and lots of price and volume
follow through. P/E of 32 and revenues and earnings are there as well. Earnings up 49% to .52. Buy point is as the stock
breaks the descending trend line. See attached graph
Legato Systems Inc. (LGTO) - $49

This stock is in the red hot Computer Software-Enterprise group. All of the stocks in this group are looking very good. This
stock has very high volume and again, a break away gap with very high volume. I would like to see this stock go sideways for
a week or so, but it could be wishful thinking. Buy point is as the stock goes into new high here at $52 to $54. Be careful if it
leaves early. You could get whipped sawed.
Well that’s it for this week folks. Be careful if you choose to go long here, and be sure not to over pay.
I will have more for you during the week. Dan

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