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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Joe Stocks who wrote (42706)	8/11/2002 1:12:06 PM
From: DanZ	Respond to of 53068

<The best plays I have made is selling the stock being added short after the close on the day added if I see climax buying.> That's precisely what I'm trying to do with PALM, just in the opposite direction. It's also the reason that I haven't bought any yet. I want to see if there's a big surge in volume at the close Tuesday. PALM was already cheap on a fundamental basis, and the index fund selling just made it cheaper. One similar situation that worked out recently is INTV. The stock got hammered down to 1.00 on index fund selling when it was removed from the S&P 600 Small Cap index on July 11. 3.7 million shares traded that day, with nearly 2 million of it in the last five minutes. The average 30 day volume for that stock is only a few hundred thousand. It based for a few days and then traded all the way up to 1.96 on July 25. Obviously these kinds of trades won't always work out, but INTV is a good example of one that did. I think they are more likely to work out when the stock is already trading at a reasonable valuation, and the index funds just push it down to a price that isn't sustainable in the short term. The same can be true of stocks that are added, as you pointed out. Monanato is being added in PALM's place, and the stock has rallied from a low of 13 to a high near 18 the last two weeks. It might be a good short term short sale, but I'll pass.