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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis
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To: shasta23 who wrote (1048)5/14/1998 3:30:00 AM
From: Q.  Read Replies (1) of 2506
 
Stefan, BASEA has a discounted convert deal, HMSC doesn't.

While I certainly look at the charts in deciding what to short, if the stock has a *discounted convert* deal, as BASEA does, I will rarely let the chart make the decision for me. Rather I will concentrate on the amount and timing of stock that will get flipped from convertibles and the risk of good news from the particular company.

In the case of HMSC, the low relative strength in combination with bad news on the revenue and FDA fronts are the short term indicators I need, so certainly I must look at the chart to get a feel for the RS. Longer term for HMSC, it's worth knowing that they have no patent protection any longer, and their product is similar to thermography which was discredited by the AMA many years ago, so it is unlikely the product will sell much, and if it does, then they have no protection from competition.
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