How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 479.20

+0.2%

Jan 9 9:30 AM EST

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To: Joan Osland Graffius who wrote (3065)	9/15/1997 12:21:00 PM
From: vinod Khurana	of 74651

I bought some MSFT October 135 puts this morning at $5 1/4. Why you might ask ? 1. MSFT just broke down below the 50 day moving average for the third time since mid-August. 2. The 50-day moving average for the first time since April has started to point down. 3. The higly bearish article in Barrons this week talks about a) institutions selling into any rally b) MSFT is refusing to buy its own stock at these levels and considers them too high. Similar to what Greenspan said about the stock market several months ago. Only this time, its coming straight from the CFO at MSFT. c) P/E ratio exceeding 43. d) analysts expect stock to trade at $150 5 years from now. Not much left to the upside from recent close. e) No new "major" products over next 12 - 18 months except NT 5.0. f) Big tech. companies ganging up with JAVA to rid the marketplace of Windows on the desktop. 4. On the past three attempts to get back above the 50-day moving average, the stock failed each time to go higher than the previous attempt. This is a very BEARISH indicator. 52 week high: $150. First attempt high: $145 Second attempt high: $142.5 Third attempt high: $140 Latest attempt high: $137.5 Todays low: $135 Notice it is failing to reach previous high by $2 1/2 each time. I think we will see a quick acceleration to $120 very soon. A good time to buy those puts before they become too expensive. I hope to sell the October 135 puts for at least $10. V.K

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