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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Jenna who wrote (11814)7/21/1998 5:30:00 PM
From: Jorj X Mckie  Read Replies (1) of 120523
 
Hi Jenna,
I have been watching and playing SRCM for about 10 days. Acquisition rumor play, supposedly for $45/share. FA for SRCM is not pretty, but supposedly they hold some key patents for CATV internet connections.

Lots of hype, both short and long. There is an SRCM thread on SI, but it, like the Yahoo board is filled with a bunch of bickering between the shorts and longs.

My original play was July 22.5 calls, which I bought two Fridays ago. Sold those when it was at $32 last week and currently have a OTM straddle (Aug 30C and Aug 25p). If the acquisition doesn't come through by the end of the week, I believe the stock will tank significantly. Obviously, if it comes through at the rumored $45, everybody will be happy.

From a Point & Figure view, SRCM gave 4 pretty solid buy signals since early June, it was then followed by a sell signal after the acquisition announcement failed to materialize last week. Today's activity reversed the stock into a positive trend, but there won't be a P&F buy signal until $32.

The current rumor is that there will be an announcement tomorrow. If this doesn't happen, I would expect a selloff on Thursday.

Tom
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