To: rfisher who wrote (2254 ) 6/9/2000 6:37:00 PM From: Zeev Hed Read Replies (2) | Respond to
It is quite simple, the area of resistance (where RMBS was "repelled" in the last ascend from about $154 was in the $187 area and that is an area of "congestion". Since I was very busy Wednesday prior to my own trip to DC, I knew I will be unable to look at the depth of the reaction. I expected a deeper retrenchment than the $200 area and (I mentioned last week when RMBS vaulted all the way to the $220 plus area, that there is another opportunity to get it under $200 soon) because of the Timna delay. Since I knew i would not be able to time during the day, I set the order in a safe place above my target of $193-95 for the bottom. If the trend in RMBS was changing, I would have expected a retrenchment to the $185 to $195, with then a bounce to about $204 to $207. The new uptrend held, so so far so good. This morning, in a reply to cellhigh, I believe, I made it clear I would be selling into any morning rally. Once more, the area of bad congestion (the reaction high from the first major catastrophic decline) was $247, and I set my mind to sell as soon as the stock gets above $242, in a strong move I would get a better price, but today by the time I decided to pull the trigger, the bid already declined to $241, and I pulled the trigger. It stayed there for a pretty good 15 minute and even went back above my price. The basic reason for selling and not waiting for a breach of the $247 area is tied to my general market forecast for the next two weeks, which is not rosy. I think I can get back in in the mid $220, maybe even a little lower. Typically, such a very strong overhead supply may require three independent assault to exhaust all the residual selling there.
