Dell's Daytraders Decision Site Message Board

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Technology Stocks : Dell's Daytraders Decision Site

DELL 127.90

+0.4%

1:46 PM EST

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To: Jack T. Pearson who wrote (452)	7/27/1997 8:30:00 PM
From: Markus	of 1124

To: Jack T. Pearson I noticed the drop, however I did not really know what was going on. I think it was just mutual fund managers, and institutional investors tried to adjust the weighting of their portfolio. If you noticed DELL was traded higher earlier in the morning. When those mutual fund managers saw that they started selling half of their DELL from their portfolio, due to the split on Monday. Some mutual funds have strict rule on weighting their portfolio. I know that most of us are using the dollar amount, however some mutual funds have to used the amount of shares instead of the dollar amount as their weighting parameters. Considering DELL was higher earlier in the morning, I did not believe that the drop was caused by lack of buying interest. It just when those fund managers sell half of their DELL the price drop, and then when the price drop it triggered some program trading also, and there was no way that human players can bought that many shares of DELL in a very short time frame. That is why the NYSE has rule that if the DOW is down or up by 50 points program trading are not allowed. The same thing is true with the S&P 500. If it falls or up by 10 points program trading is stop at the NYSE, but DELL is traded in NASDAQ. The result was steep decline of price in short amount of time. You might have noticed that after DELL was down to $160 the price stabilized in the $163 to $165. I think if Friday is not the last day for the split, DELL would be up by 2 or 3 points. I think DELL will open higher on Monday Good luck to you. Bye

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