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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Burjis S. who wrote (20861)	2/21/2000 9:38:00 AM
From: Rande Is	Read Replies (2) \| Respond to of 57584

CORL is a rare bird. Here is why. First of all, Canadians love to short American stocks. . .second, because they can [far easier than we can], but also because that is the side of the trade where the big money usually sits. Third, the Corel company has been floundering as a graphics company for about a decade. . .with Quark and Adobe always beating out Corel's products. . . until Corel Draw gained popularity with the IBM graphics users [a new breed of non-mac users that started about 1996]. . .that put the company on some better footing. . .but still with too few products and too little market share to be competitive. Then the CEO left much to be desired. . . giving fellow Canadians all the more reason to hold CORL short. So for years now, it has been in the dumps. Then there was Linux. Corel jumped out into the lead with a battalion of applications and the market followed. Now they are making serious money and have become a serious software company with major market shares in the Linux market for consumers, PC/Linux office suites, graphics for PC and now Linux and soon [with the help of Borland] in the business application biz as well. Problem is the Canadians [as well as others] are so used to holding CORL short, they can't seem to let go. So each time some news comes out declaring Corel the leading Linux play, the stock jumps up on short-covering. . .but as soon as the volume dries up, the price falls. Rarely in the history of the stock, has it ever shown gradual gains which led to higher prices. . .it just doesn't trade like that. Instead, it falls slowly and steadily, then shoots up very sharply with little to no warning. So how do we play such a stock, when we know this AND we like the company's prospects for the long-term? We must sell the peaks and buy the dips. . . the dip to 19 was substantial enough to place a buy. . . .this move to 15 is substantial enough to place another buy. . .and any moves to 13, I would think would be met with substantial support from this new crop of investors that see Corel in a different light. But what we must remember, is that this type of trading will probably continue for some time. . . so when we see that spike to 24, it is best to sell at least half into it. . . then wait and reload. . .or short there [while holding your lowest core position long], thus locking in your profits and/or making money on the way back down to where you would want to reload. This all seems like a lot of work just to play a single stock. You referred to the MMs. . .in the current market, there is a wash and rinse process that is happening on multiple levels. The Dow and Naz have been under a wash and rinse cycle, with the wild swinging ups and downs. . . Then there is a sector wash and rinse. . . internet security, opticals, biotechs, gold, fuel cells, biotechs, B2B, cyclicals, internet security, biotechs. . . . . . .We just saw the biotechs make nearly 2 weeks of fantastic gains [with wild swings], only to cough much of it up on Thurs and Fri. . .if you were not playing these with tight stops, you probably got seasick as your equity went up and down with each cycle. But then there is wash and rinse at the Market Maker level. . .with individual stocks. . . just look at a 15 minute or 60 minute chart of a tech stock to see what I am talking about. Ups and downs. . .back and forth. . . shaking out of the hands of those that are less experienced, afraid or just unsure. . . .and back into the hands of those that are in the know. My advice? Pick your winners. . .your longs. . . and don't be quick to give them back. . .sell the peaks and buy the dips [with partial positions], to assure that when this washing and rinsing subsides, you will still have the same number of shares to hold long as you did when it all started. Sitting on the sidelines with plenty of cash is not a bad way to play either. The worst part about this current wash and rinse market is that there is no simple defense for it. . . and it is nearly impossible to not take a hit when playing long. That is why I keep saying to sell those peaks and buy those dips. . . My favorite genomics stocks. . . CRA, HGSI and GENE. . . .they go up to a new high. . .I sell them. . .they reach another new high, I watch [sometimes I get it right]. . . because I know they will return. . .and sure enough, they drop [at different times] and I reload. . .I was buying HGSI late day and selling early morning after the gap up. . .while I was buying CRA in the morning before it ran and selling in the afternoon before it fell. . . .whatever it took to stay ahead of the swings. . . and the only thing that worked was selling the peaks and buying the dips. . . and if I didn't get out at the high, so what? . . .and if I missed buying in at the exact low. . .no problem. . .over time, it still counted towards gains. . . and isn't that all that matters? You get no medal for selling the high of the day Anyway, I hope this focus/analysis turns a few lights on in the survival of this sort of turmoil. There does not seem to be an end to this volatility. . . so we must all adapt to it. . .and most importantly, learn to profit from it. I look forward to hearing how others have found ways of making extra profits from the volatility in our long holdings. I know all about the pennys that are being played one by one. . . but rather am interested in how others are successfully playing our large and mid-cap long-termers. Rande Is