Weekly Pick

["Jim Greening" <JimGinVA@xxxxxxx>]

All,
     I was stopped out of several positions this week and still am over 40% 
cash even with the shares of Janus World Wide Mutual Fund I picked up 
Thursday.  We did have an interesting week with the NASD OTC Index testing 
both support and resistance and ending up essentially moving sideways like we 
thought it might.  
     The NASD OTC Index at 1209.29 is in a Long Term Up Trend Channel (LTUTC) 
with the top at 1440 and the bottom at 1196.  It sideways move did confirm the 
breakout of the Short Term Down Trend Channel (STDTC).  However, It is still 
in an Intermediate Term Down Trend Channel (ITDTC) with the top at 1327 and 
the bottom at 1184.  I think the most likely scenario from here is a 
continuation of the sideways move to the bottom of the LTUTC and then a good 
move up to at least the top of the ITDTC.  This coupled with the new up trend 
in the big cap stocks makes me cautiously optimistic.  Im going to start 
easing my cash back in over the next few weeks.  However, Ill only go into 
stocks with good reward/risk ratios and fairly close stops.  This week I like 
Three Com (COMS).  This has always been a good company and its acquisition of 
U.S. Robotics should help even more.
     COMS at 26.75 is in an ITDTC and STDTC within a LTUTC.  It dropped from a 
little over 80 to Tuesdays spike low of almost 20 in about five months.  It 
has a P/E of 17.08, a PSR of 1.79, a ROE of almost 30%, almost no debt, 85% 
institutional ownership, 10% insider ownership, and still had 18% earnings and 
46% sales growth last year.  The top of the LTUTC is at 85 and the bottom at 
25.  The STDTC may have been pierced Thursday before Fridays fall back.  The 
top of the STDTC is now at 27.875.  The top of the ITDTC is way up there at 
64.75.  RSquared is at 0.7 and rising, S/C is negative but rising, and MFI is 
under 50, but rising.  I think the odds favor the long term trend holding with 
a move back up to at least the top of ITDTC.  This makes a very good 
reward/risk ratio with the stop just under the LTUTC.  If the market looks 
good Monday, Ill open a position with a target of 64 and a stop at 24.75.
     Ill send charts of the above to everyone on the e-mail list.  If you 
arent on it and want on, just yell.

Jim