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Strategies & Market Trends : Steve's Channelling Thread

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To: Zeev Hed who wrote (20256)	7/11/2001 12:58:15 PM
From: ajtj99	Read Replies (1) of 30051

Zeev, I thought I read a mention of AREM by you recently. Their situation is quite close to that of KKD, in that they are effectively controlled by shorts (I've read as much as 15-million out of 17-million of the float is short, but safe to say at least 2/3rds is short). I'm not quite clear on whether their accounting irregularities are real or imagined, but if they bottom out in the end of August, they could explode up to 70% in short order on short covering combined with a small float. The stock is in a rising wedge from the low in April, and I can't see it continuing if the market bottoms in late August. A breach of around 17-1/2 to 18 would break the wedge at that time, and it could drop below 15 quickly. My question is have you ever had any experience with a stock that's had this level of short interest. The only stock I can compare it to is KKD. I'm going to do some more DD on it, but the wildcard is the huge short interest. I have no experience with that and how it may play out. I can only see upside potential in an up market if the fundamentals are sound.

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