Hi Chen: How do you see AOL for this week or come Monady ?
I see her as very undecided..like at a critical point to go back
up or on down..I have no real news or noise to report.
Lets keep in mind to seperate the stock from the company..AOL is
worth watching as long term short..but keep in mind hot air
ballons can rise, and she has shown us all that.
I'm not much on TA..but what little I know shows her ( the stock)
as still strong on the short term..this is one were I doubt any
of us may see the time and place she takes the big nose dive.
It will likley come as a suprise to even some of the insiders.
What causes you to think she will dive in april ?
Right now I'm in a hold pattern even with my Jan puts, I will
retain them just in case she dumbs over night.
Short term..run her on a chart..and put up a 50day MA,
as a rule of thumb..if she gets 20% or more above the 50day MA,
and has high volume..it's realitivly safe to take put position,
as long as you have two weeks time left to ex date, I'd sell
the puts short term puts as she touches the 50 MA..and watch,
if she dips below 50 day and starts back up on LOW volume,
then I'd buy calls you may wait till she starts up enough to
cross above a 5 day MA..and time she is moving up and price
above 5 day MA..and it Above 10 MA..she will likly keep going
up to resistance level at about 20 to 23% above the 50 day MA.
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Keep this in mind if your shorting her..she is on an uptrend,
at least for the time being. Much care needs to be taken,
there are factors that move the stock..( money flows ) that
do not heed or care about her long term outlook.
I'm sure a lot of shortselling by ( daytraders ) goes on with this
stock..all high volume days are the shorts passing the hot match
back and forth..at least one program seems to be running that
shorts early in the day..and buys back later..and it seems to
buy back extra stock with it's profits..this is keeping an over
all up trend in place, when that accumulation will get dumped
only the person running the program knows.
The volitility of this stock is a traders, dream but can be
a nightmare if you jump in too soon or bet the barn on her
next move..I have made a litte more on calls now than I have on
puts. Just because I see her as a long term dud, or a walking
dead man..don't jump on her thinking she will keel over next
week..she could..but I think she could also make 50.
Right now she is at a flip the coin level, with some support at
40, then 38. If you see the price below 5day MA..it Below 10day,
all of them below 50 day..then she will likely wash out instead of
falling off the clif.
Right now when she gets 20% above 50MA..I buy JAN98 puts..this
causes me to average the cost of the puts down, If she continues
to trend up..I'll move to 99..I know she is badly flawed..and
way overpriced..but the subject should be how high can she go,
in one respect that will add to the fall.
We already know she can dive 50% in value in 25% of the time
it takes her to climb the hill..but she can be persistent in
her slower trend up for 75% of the time, before it's over I see
her down in single digits and then getting bought out.
BTW D.C. Cole sold $4,542,500 worth between 2-12 and 2-18,
for an average price of 36-3/8, I think he had some inside info,
and took his profits at that time..just in case, any body invested
over that price is subject to get badly burned. What so many people
don't know is that many of the large investors can jump out at
$20 and still make money.
Jim
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