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Technology Stocks : Cymer (CYMI)
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To: rsc who wrote (9924)11/17/1997 1:47:00 PM
From: Darryl Olson  Read Replies (3) of 25960
 
Don't underestimate the shorts. There has been some covering during the ride from $16+ to $22+. However, there is still (IMO) a considerable short volume outstanding. They are waiting for some of the recent pent-up buying volume to subside. Once it does, they will be shorting again into the low volume and pushing the price back down.

They will continue this shorting game until the institutions start driving the buy-side volume at which time they will be forced to cover (or suffer the consequences). Remember, much of the original shorting took place at higher prices than we are at today. Thus, the shorts are still making money, just less of it. They are waiting for their opportunity to push the price back down again. But, this won't happen until some of the buying volume declines.

What we need is an analyst upgrade, or the realization by a few institutions that this is a winner. This will generate the forward momentum that is necessary to crush the shorting game. The one variable that may impact this is the shorting that was done by the convertible bondholders. They are shorting for a different reason and may not cover until the price nears their original short sale. Of course, if they all scramble to cover at roughly the same price, this could trigger another squeeze.

I think it is going to get interesting from here.
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