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Technology Stocks : BORL: Time to BUY!
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To: James L. Fleckenstein who wrote (7072)11/3/1997 9:20:00 PM
From: jfb  Read Replies (1) of 10836
 
James,

To my knowledge, the term "support" to refer to a stock price is used in two ways: the first is seldom seen, and has meaning; the second is often seen, and has no meaning.

First, the meaningful use.Say you're the director of corporate investing at IBM and management has just decided to allocate $3.5 Billion to repurchase the stock (this actually happened last Tuesday). Say it is your opinion that IBM is fairly priced at $100, but overpriced above that level. You may then issue traders an unlimited buy order at $100. Any tendency the stock may have to go below this level will be overcome by your order, so that you are in effect "supporting" the price at $100.

The second, more common use, is the "guesstimate" you were referring to. I believe this part of so-called "technical analysis" to be strictly meaningless, like the whole.
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