Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: jack rand who wrote (6554)	12/22/1997 11:35:00 AM
From: Jon Tara	Respond to of 13594

Jack, with premiums at the high level they are at right now (across the board, not just AOL) I prefer to stay away from buying puts. Incidently, I was trying to short about 15 minutes before the close, not right AT the close. I would see an uptick, place an order, and have nothing done. Cancel the order, wait for another uptick, etc. etc. etc. Somebody else reported having a similar problem with Schwab (I was using Datek) on Friday as well. Just as well, my indicators have turned up, and I am going to wait it out. Will at least wait for another short-term (I use a 1-hour bar chart) crossover from overbought. Longer-term (using daily bars) AOL is still in overbought territory, but turning up from a downside crossover. I think now it could cross back over positive and linger in this overbought region for a few days, and if it moves up further, this could create an extrodinary shorting opportunity. It's moving toward being over-bought on just about any cycle time you want to look at, double-top RSI, etc. etc. Although I am looking at the indicators more than the price, I do see what looks like a flag, which implies that it will go through it's previous high, and have to assume that other traders do as well, and it's certainly possible for AOL to go to, say, 100 before exhausing itself. All that is needed to create a dream shorting scenario is some news that convinces some traders to ignore the TA. This will almost always create a blowoff top followed by a steep decline. The long-anticipated split announcement could be just that news. Yes, I am looking at short-term. I have 3 targets for AOL: 80 - near-term, if the market rallies 65 - near-term, if the market falters or trades flat 30 - long-term I don't have the patience for the latter, though :) I agree that LEAPS could be a good way to play the latter, but of course there is still the premium issue.