$35 Trigger of Program Trades
I couldn't agree with Chris Sterner more. Take
a look at today's intraday volume and price charts
on Lombard, folks:
lombard.com
(You need to register, for free, with Lombard before
using this.) Or, if you like, wait until tomorrow
and view today's charts on Guy Gordon's Iomega
Stockholders' Page:
white-crane.com
So far, at least, the bottom hasn't fallen out.
What happened is that the price drifted slowly down
to that magic $35 secondary sale number, at which
point a whole pile of computer-managed stop-loss
sales got triggered. That produced a spike down
all right, but it bounced back up a couple of bucks
from there, meaning that there is still support
for the stock here in the 30s. As I said in my
previous post (sent just about the time that
magic 35 mark got hit), this downward move today
may well panic a lot of small investors who don't
know better, and that'll bring the price down even
further, but this is not a vapor-laden momentum-
only issue, folks. As Chris says, if yer in long
term, stay cool. Quantum and company aren't
struggling just because PC sales are down a little.
They're getting Zipped and Jazzed. This same
downward spike could have happened a week or two
ago when the price toyed with 36. It could easily
have dropped another point then and caused the
computers to kick in at that time instead of now.
This is just as I predicted a little earlier. The
price will be pretty volatile short-term, meaning
that Joe Rizzo will make his profit, and then it'll
steadily rise on performance long term, which is
when Chris and I and other roller-coaster riders
will make a little money.
When investing in a stock with solid fundamentals,
accumulate on weakness.
Cheers, Tom |
