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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Apakhabar who wrote (13147)	2/9/2000 9:43:00 PM
From: Raymond James Norris	Read Replies (2) \| Respond to of 14266

I think most here would like to think that the short interest has been responsible in some way for the big decline. What makes your argument distressing to long-term holders is that it seems to say it is not. Apakhabar, Thank you for your reply. The logic that the short position is responsible for the decline is "non sequitur." That is, it is a flaw in understanding of what caused what. The short position did not cause the decline. The decline caused the short position. As THQ grew weaker, more people shorted the stock. Now their actions probably accelerated the decline, but it did not cause it. It is not possible to say now is a "special situation" because that shouldn't change the support of the stock. For example, in 1998 when everyone feared THQI would lose 90% of its revenue with the loss of WCW, THQI fell quickly. But, it didn't break its 5 year old uptrend line. Why? Because institutions knew the company's value had not significantly changed. Today the same should occur. But it hasn't - which is a sign of weakness. What do you say about starting a new trendline beginning at the bottom that was hit shortly after the loss of the WCW license. If you draw that line, it's a little less steep than the four-year line, and it would not yet be broken In TA, there are 3 reasons why the above cannot be done. First, the longer a trendline, the more important it is. The short term trendline you are talking about is not as important as the 5 year one I am talking about. The 5 year in most cases will give us the right answer while trying to draw trendlines that better fit one's position is dangerous. Secondly, trendlines are drawn from the lowest low to the highest low preceding the highest high. Third, one more often adjusts trendlines to higher slopes than to lower ones. Adjusting trendline slopes to lower ones is a dangerous practice. You can lose your shirt doing that. Conservatively Yours, Raymond J. Norris