Well now seems like a good time to revisit a comment from one of our favorite prognosticators. He made a connection between 3COM and IOM last month.
I give you an excerpt from a Rocky Reid post, dated 5/29:
>>>>For people like to do short stock in a short term, there're too many stocks available, like USRX.<<
Oh, please. USRX/COMS are marching up very rapidly, with resistance not coming into play until another 30% hike from here @ $70 (for COMS). The all-time high is 60% away from here, at $80, and it looks like it could bust right on through that within the next month or two. Shorting COMS at this level is suicide, just ask the shorts who just got reamed as of late. Momentum is clearly in the networker's corner these days. Even on this down day in the techs, COMS has held to about a 3 point loss. This doesn't even erase the gains from just yesterday's 5 point gain. The networkers are catching their breath today, but you can be assured that the big boys are loading up on these babies as the short term profiteers are leaving. Hence the relatively stable price action today.
IOM is so heavily shorted, that any movement whatsoever is like dragging a ball and chain. Why not leave this prison of a stock, and join the Bull market? Today, you can unload IOM, and get in on a likely 60%+ gain inside of a month with COMS/USRX. You can always get back into IOM later, as the price will not have moved hardly at all in that time.<<
That last paragraph is especially cogent. Since then, I've noted the movements of 3COM vs. IOM.
____
5/29
COMS opened 51, closed 47 13/16
IOM opened 18, closed 17 1/2
6/6
COMS opened 44 3/8, closed 46 5/16
IOM opened 20 1/4, closed 20 1/8
6/18
COMS opened 47 1/4, closed 46 15/16
IOM Opened 22 3/8, closed 22 5/8
6/24
COMS opened 49 1/8, closed 49 3/4, up 1 1/2
IOM opened at 22. closed 21 1/8, down 5/8 from yesterday.
I've mentioned this before. Once again, I am not trying to say that 3COM is a bad company or a bad investment. I'm only trying to slam Rocky. (SLAM!)
My own conclusion is that Iomega, even after two down days, is still up more than 3 points from the day RR offered his advice, and that COMS is down since then. Unfortunately, COMS will probably drop tomorrow, being punished for the serious crime of meeting expectations.
What IOM will do is anybody's guess. Possibly continue retracing? Could be.
- Allen |
