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Technology Stocks : IDT *(idtc) following this new issue?*
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To: Patherzen who wrote (1711)1/31/1999 12:36:00 AM
From: Bill Zeman  Read Replies (2) of 30916
 
Patherzen and Thread:

I have heard a lot of talk on this thread about market maker manipulation as the reason for IDTC's recent inability to break above 16. MM manipulation is largely an internet stock trader's superstition. It does and has happened, but is rarely ever the reason for the price movements or lack thereof in a stock. Market makers make plenty of money just buying and selling the shares, and it is the accepted explanation that supply and demand determine the movements in the price of a stock.

The reason this is an unhealthy superstition is because the holder of this belief does not study to know the true answer to why a stock is doing what it is doing, but rather just gives up with an exclamation that, "those pesky market makers are at it again!"

In this recent case where IDTC is fluxing between 14 and 16 for a few days, two reasons become readily apparent to the mind of one who looks for why:

1. For about a 4 week period before the downgrades and the drop in price, IDTC rolled between 14 and 16. Therefore it has built a lot of support/resistance at these very levels we are now mired in.

2. Two fridays ago when IDTC dropped down to 9 3/4, the stock traded a whopping 7 million shares. All these shares traded between 9 1/2 and 10 1/2. That means somebody(s) bought 7 million shares at around 10 a piece. (it may be that NASDAQ double counts the shares traded, counting both the buy and the sale, in which case all my figures would be cut in 1/2, same results though). You gotta ask yourself: What are those people doing with their 7 million shares that they bought at $10? What would you do? How about selling them at 15 1/2 to 16 dollars? 50% profit in 2 weeks. Not bad. Now look at how many shares have traded hands in the few days that we have been churning between 14 and 16. 1 or 2 million a day. That adds up to about 7 million by now, If not by now then by tomorrow or the next day.

Anyway, it seems apparent from thinking about the reasons why the stock might be stalled here that there is probably not too many sellers left out there.

Long IDTC (and hoping to make a pile of $ from it)

Bill Z
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