AND THE WINNER IS :
I believe the Friday guess goes to John Falconer 66 1/4, although from his response one could have taken this as a call of 65. If that were the case the winner would be John Kratus on post 4469 who predicted 65 3/8. Suffice it to say that no one was really close to AOL's closing at 67 1/4, and we received 9 different guesses for Friday's numbers!! No one guessed between 66 3/8 - 75. AOL did what a lot of stocks are supposed to do short-term ... not much of anything!
Now let's look at this clearly. In the last few weeks we have had a market sell-off of close to 500 points on the Dow. With this sell-off, AOL has remained all but unaffected. AOL has created a double-top (possibility) in the late few weeks as well, yet it has made tremendous support so as not to complete the Double Top (which would require a move down to 62). Why hasn't it completed this should be the question.
I believe it hasn't completed the double top for a few reasons, the heart of which may truly be the shorts holding the stock up to keep their incestment alive while they have everybody including their brother and sister providing the market with a reason to get into a sinking ship so they can get out! Ruthless those bums!! Here's the technical reason though, and its quite simple (mainly because I am <<G>>). AOL has one of the strongest aversions to going below its 50 day moving average than most stocks out there. In fact it doesn't like being close to it! Everytime we come close we get a 5 point or so bang up. Its like two magnets with opposite poles ... they're fine apart, but get them close and they will have a strong reaction to bounce away from each other.
Final magnet thought. As long as the shorts are there, it appears the bounce will be UP 5 points when it approaches its 50 day MA. But when they disappear, that bounce will be very powerfully down indeed!!
I loved that link to the case brokerage firm! The headline describes their Clinton-like way to win others over "It's the brand stupid!" I know you agree with this Sam, and I know the power of a brand, but I also know that AOL's a little late to the table, and the brand's worth is a 3-4 years away from being the profit-maker that it could be and is priced to be.
Calling people stupid sometimes will make them stupid enough to believe (case (no pun intended) in point Clinton!). I truly believe that the shorts will leave slowly (as they have been), and may even decide that they let it take the next time around and not cover. (but these are professional traders who just want to manipulate the stock in their own range and timing to take out stops and make their profits in both directions). Jim had one thought he kept pounding into us, that was "Watch the Jan 25 calls ..." He believes that this is where the shorts have their protection. His statement has always been that when that money is taken out, then AOL will tank. I see OI at 577 ... but also a large amount of OI on the 27.5 and 32.5 contracts. Not too sure I fully understood Jim's reasoning here.
Sorry so verbose ... I'd love to hear others comments here. |
