Teletek: Big Earnings About To Be Posted Message Board

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Microcap & Penny Stocks : Teletek: Big Earnings About To Be Posted

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To: Jim Privat who wrote (620)	3/20/1996 2:20:00 PM
From: David Luckie	of 1014

Of course there are a few unscrupulous traders that manipulate stock prices they way you described, but most "professionals" would take one look at the 90-day chart and start looking for a correction. So they sell the stock short in the hopes of profiting from the selloff. On stocks like this that have had long runs with few corrections, what starts as a correction can turn into a wave of panic selling and sales from tight stops. It also bears noting that current SEC rules prohibit short selling on a downtick quote condition, so most of the decline you saw today before lunch wasn't a result of shorts. By the same token, a good bit of the rebound from the 6-3/8 mark was probably those people who were short yesterday buying to cover their positions and take their profits. There's as much a herd mentality among shorts as there are longs. You can bet that there are some shorts who sold at 7, 7-1/2 and 8. There's not much a small investor can do to avoid these price swings. The best you can do is ignore them--they're all part of an overall upward trend.

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