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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (44271)	3/28/2000 4:38:00 PM
From: drsvelte	Read Replies (1) \| Respond to of 99985

Morgan Keegan is a regional outfit. However, they apparently are well-respected in terms of their coverage of the fibre channel companies. The individual that made the call is considered one of the "axes" for that group. I think you're right in the sense that the change in margin requirements accelerated the selloff.

To: pater tenebrarum who wrote (44271)	3/28/2000 4:43:00 PM
From: Les H	Read Replies (2) \| Respond to of 99985

EMLX -- Computer Periph -- Technology 28-Mar-00 14:28:13 Before the opening bell, Morgan Keegan cut its rating on Emulex Corp to ?Market Perform? based on price. The analyst also noted it believes QLogic (QLC) is a better play for Fiber Channel growth. EMLX has plunged $47 9/16 to trade at $170 1/2, making the stock the largest point decliner on the NASDAQ. The downgrade encouraged speculative traders to pare their holdings in the issue, sending EMLX tumbling. However, the sell-off was exacerbated by margin calls. Many of the short- term traders in EMLX likely relied on margins, or borrowed funds from brokerages, to obtain some of their position. The early sell-off prompted margin calls, where traders must either deposit money to bring the account to minimum levels or sell some shares to cover the borrowed funds. Additionally, Datek Onlike made Emulex ineligible for margin trading due to the volatile price movement. As a result, any EMLX bought on margin with Datek must be paid for in full, which pressed shareholders to sell some stock-- adding more fuel to the sell- off fire. Less than 10% of today?s volume is related to block trades as traders try to maintain liquidity in the issue. I- Watch?s post-trade chart illustrates the heightened participation from retail investors, with retail brokers claiming an unusually strong 35% of total volume while institutional brokers have reported nearly 50% of the total volume. Much of the institutional volume is related to market makers as well as professional day traders. from Yahoo.