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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT
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To: jeffbas who wrote (170)9/7/1997 7:11:00 PM
From: Robert Bond   of 1250
 
On Motley Fool, you allude that perhaps some insiders or industry experts have some sort of knowledge and hence the selling pressure. I don't see how you could know this unless you have some connections yourself. In any event, from my experience this looks like a shakeout. The stock hits a new high past its fundamental support and holders feel satisfied with the gains so they sell (me included). This causes weak hands and stop loss orders to sell more stock and the price falls further. The price returns to some reasonable or under valuation and traders start to buy pushing the price back up. I think we've all noticed the high volatility. Granted, if the price falls below its midterm support level, which I think is $35, then something else is at work. I must disagree that the fair market valuation is $50. At this point, I think it's more like $39-43 based on 30x earnings. I usually avoid buying stocks with more than 30 p/e unless the growth rate is something phenomenal.
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