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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (13544)	8/10/1999 2:42:00 PM
From: Razorbak	Read Replies (1) \| Respond to of 27311

Risk versus reward ratio. <eom>

To: MGV who wrote (13544)	8/10/1999 3:26:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

MGV, permanent bulls and permanent bears get into trouble with stocks like VLNC (and MU). Technically, there has been very strong support at the $5.25 to $5.5 in this stock (regardless of the fundamentals of the company). The risk is that I drop 10% (I have a "mental stop at $4.875), the reward is a simple bounce back to the resistance of $6.5 (about 20% gain), and an outside chance that the company announces a PO with a jump to in the price of the stock to about $7.875 to $8.5. If such an announcement is of the "unusual kind" (a long term contract of more then let say $100 MM like ANCR got), then I would not be surprised to see a double from here to match the year high. I think that the risk/reward ratio right here is pretty attractive. If it breaks under $5, you may see an avalance if for no other reason that it might become unmarginable and margin calls will flood the tape. Zeev