Murli Reddy,
Thanks for the support earlier. As for NITE, all I can say is we can use deductive reasoning to project what's up next for NITE. Given the recent onslaught of news, much may have now been discounted in NITE's price.
I've done plenty of shorting in my career and this is one time I would NOT short a stock. There are better short plays than to short a potentially explosive rally from an oversold condition. All it takes is an asynchronous news event and you get significantly more bang for your long buck coming out of a trough than you do when the stock is already peaking. Conversely, you get less bang for your short buck when the potential for trend reversal is exceptionally high as it is at this juncture.
True, there's often a profit-taking pullback on a technical rebound as Morgan hopes for, but picking your entry and exit can be tedious and unprofitable. Shorting an over-extended, richly valued stock is one thing, but shorts on oversold trend reversals are less likely, over time, to win the game.
I agree with your earlier comments about attitude. Morgan has held this board together for a lot longer than I've been posting here and he has a lot to offer. I don't always agree with him, however.
As a staunch supporter of First Amendment Rights, my intent with Morgan never was censorship, rather contributing to a healthy balanced "message board ecology." So I don't know why people feel a need to encourage Morgan to keep posting - as if he's going to stop. That was never suggested. However I will continue to refute anything I disagree with that may, IMO, inappropriately convince investors, long or short, to make bad decisions, and I would expect others to do.
For starters: John Sanderson, in posting just part of your 1/7/99 article on the Archipelago ECN, you didn't post a portion of the article that might refute your assertion that E-trade will dump NITE:
"ECNs are part of the electronic backbone that permitted the emergence of day traders, investors who make a practice of holding stocks for only hours at a time. However, it is UNLIKELY that the interest from E*Trade and Goldman Sachs WILL AFFECT day trading in the short term, because approximately 4,000 serious traders and brokers ALREADY make use of Archipelago"
That was 1/7/99, six months ago.
From the NITE conference call, there was no mention (six months after this article) that E-trade order flow to NITE was declining (in fact, my understanding is that it has INCREASED since that article!).
Your statement "E-Trade will drop NITE for Archipelago (ECN)" is perhaps an overstatement, especially because it appeared almost like a headline in your post.
Either Pasternak is deceiving all of us, when he says (paraphrasing here) that there will ALWAYS be a need for market making liquidity for the majority of Nasdaq stocks ... or he knows his business well. |
