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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: AlienTech who wrote (7468)4/26/1998 1:51:00 PM
From: VLAD  Read Replies (1) of 23519
 
Alien,

Few lessons I have learned while trading stocks (the hard way).

1)Never take a position against the current momentum-it is better to
follow the trend than to fight the tape.

2)Stocks with high short interest that move upwards tend to continue
to move up until reaching over bought status.

3)Even the shorts know that if Vivus keeps moving up they are better
off covering and taking a new position at a later time.

A good example would be MU in December. I could of taken 65k off the
table but did not because of tax considerations. Instead of covering at 22-23 I covered at 29 and lost most of my profits. Since then MU has moved up as high as 39 and back down to the 27's. The fundamentals of MU are about 4X as bad as they were in December yet the stock currently trades in the low 30's. Why? Just look at the short interest to get your answer. Institutions scrambling to cover their short positions before the next big run up occurs. MU is currently losing millions every day and the dram outlook is poor at best yet it continues to trade at grossly over valued prices. By contrast, Vivus is trading well below fair value and has a higher % of short interest.

On Thursday Vivus broke it's 50 day MA. On Friday it broke it's 100 day MA. At this point Vivus is showing up on the trader's radar as a strong buy even if only for the short run. If the shorts start to get rolled over its going to get ugly as some serious short covering takes place. Hopefully we can see something 1/3 the magnitude of the internet stock fiasco and fill the technical gap soon.

Still very long and very patient.

VLAD
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