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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (26256)	7/16/1999 7:31:00 AM
From: t2	Read Replies (2) \| Respond to of 74651

Teflon, I hope we have a good day today. Unfortunately, i won't be able to watch the fun---I am looking lighten up my leaps position if we get a options expiration related rally--somehow. Of course we could get an earnings rally as well--so far MSFT has lagged in this area and needs to catch up. Still very bullish long term.

To: Teflon who wrote (26256)	7/16/1999 12:56:00 PM
From: Sir Francis Drake	Read Replies (1) \| Respond to of 74651

Hi Teflon - I hope you are enjoying this - MSFT broke 98, and the volume is decent. However, not to rain on anyone's parade - you have to look at volume very carefully. Sometimes, when retail investors jump into a stock, institutions take the opportunity to sell into strength. Of course, that makes the volume very high. How to tell if f.ex. retail investors are buying while institutions are selling? There are several ways, and there are sites that track institutional money involvement. Or you can watch it on LII. Finally, and this is not very reliable, you can simply wait to see how a stock closes. If there is a lot of volume, but the stock moves up by a relatively small amount, or, even is flat - this means that distribution has taken place, where one side (retail, or institutional) sells into the strength, and so basically the stock churns on high volume - that is not bullish, because it means there is one big side (retail or instit.) that does not believe in the potential of the stock. That institutional money has been leaving MSFT, does not surprise me. There has been tremendous concern with valuation, and also, when the move to diversification into the "value" plays and the cyclicals nonsense took place, MSFT was a very liquid source of funds. A further concern has been that this year could be very trying for the market, especially as we move into the second half (Y2K concerns, fall sell off etc.). The big concern of traders now, is that there is too much optimism about MSFT earnings. The feeling is, that the expectations are too high, and very likely to be disappointed by what MSFT actually announces - and once the earnings are over, again there will be no good news on the horizon for some time, while the market is moving into the summer doldrums and the fall panic. Also, if today's tracking stock rumor gets no confirmation at the earnings, there will be a furious sell-off, as there has been buying today on that rumor. Anyway, that's what I hear from the trading grapevine. Longer term, any consolidation is very healthy. Remember, some years ago (actually a long time ago :)) MSFT spent 18 months flat - absolute agony for most people. Yet, it would have been a gigantic mistake to sell. Again, and again, I maintain - keep MSFT in your portfolio as a kind of cornerstone. It will make you rich slowly. It is not a rocket, but it is very, very steady. Good luck! Morgan