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Technology Stocks : Neomagic Corp. (NMGC)
NMGC 0.0158+70.6%Jan 14 11:22 AM EST
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To: James Wright who wrote (2209)12/9/1998 8:03:00 PM
From: vincenzo  Read Replies (2) of 3645
 
Jim, unfortunately, I am still out. The short squeeze scenario which I presented previously, is still alive and well. The strong uptrend Neo has been in since early October is still intact. Neo is near the top of the upward sloping channel. The upper and lower limit is currently $24 and $20 respectively.

With today's action the next resistance level is the all time high of $26. If the SOX and overall market continue to behave, Neo will test this level in the near term.

Dana, I feel a fair market value for Neo is currently is very close to your $28 target. A strong potential now exists, however, for Neo to blow by that target by a considerable margin. All the conditions necessary for a blow-out short squeeze are currently in place. If the squeeze continues to develop, Neo could exceed fair value by two to four times. If the overall market decides to test 10,000, I would see Neo easily pushing to 1.5x fair value or about $40 even without the squeeze factor.

If the market breaks down on us all bets are off. Neo typically correlates better to the SOX than the overall market. It can move counter to the SOX for a short period of time but will always bend to the overall trend in the SOX over the longer term. Right now the SOX is on fire and may test 400 before it breaks significantly.

I am currently reevaluating re-entering Neo and will decide based on my market indicators.

vincenzo
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