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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis
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To: Q. who wrote (2222)4/20/1999 1:21:00 AM
From: chester lee  Read Replies (1) of 2506
 
John,

One conservative play is to place a stop at a 10% profit on one-half of your position,
and a stop at 0% profit for the remainder. If OCOMD heads south, you can reset your
stops, or take some profit. If OCOMD runs on positive news releases and PR hype,
then you should get out with a slight profit and an opportunity to reshort. The risk, is of
course finding available shares to short.

My assessment. OCOMD has a slim, close to zero chance of succeeding. They are
closer to BK than I am to quitting my day job for a life of fast trades and quick money.
Their Market Cap is <4mm. The flaw to my strategy is the thin float and low trading
vol. Any spike would quickly take out your stops, given the thin spread on a 16%
profit. The secondary financing is OCOMD's last hooray. If they fail, you can cover
below $1. You know this and they know this, but they have got a lot more a risk than
your short position or mine. I think they will try their darnest to pump the stock above
$7. They have to, since their livelihood is at stake.

What an interesting situation indeed. They will succeed in the secondary because their
dire financial situation will overcome their poor fundamentals.

chester
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