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

To: FDHIII who wrote (7951)	2/17/1998 2:44:00 AM
From: FuzzFace	Read Replies (1) \| Respond to of 13594

Splits do not automatically drive stock prices up. If a stock is trending up, it will probably continue to do so once a split is announced. If it is trending down, same thing - witness CA's split in 1995 - no help there. Sometimes, a stock that was trending up has its trend reversed by a split, probably because the split was ill-advised - witness IOM's split in Dec 1997. A better rule of thumb is that a split accentuates the current trend in a stock, be it up or down, and but can accelerate a reversal if it happens when a stock is peaking. Why did Steve Case sell? Because insiders are usually as clueless as to a stocks short and intermediate term movement as the rest of us. Unless they know something really big. Is AOL rigged? Beats me. But it sure looks it. I am afraid to take any position in AOL. If the Dow goes to 9000, as some believe, AOL will see 125-140. But the short squeeze has removed a big safety net under this stock. If the market goes south, there are not many shorts left to cover. This means any safety net will be provided by new longs. And when a stock drops hard, those kind are few and far between. So what's a fella to do with some mad money if he wants to play AOL? The best I can think of is some deep in the money puts 5 months out. Perhaps wait for AOL to hit the mid 120's and then buy July 130's .