To: XOsDaWAY2GO who wrote (13187 ) 3/1/1998 4:18:00 PM From: Thean Respond to of 95453
<off-topic>Barbara, The breakout on OPMRF is based on long term resistence trendline. If one draws a line connecting the 3-4 previous highs and call that a long term resistence trendline, Firday's close broke that. Typically this type of breakout is driven by real news, like a major news is about to break and those in the know went out to buy immediately, paying no attention to the resistence (which traders do but who are not in the know). You are right that it closed above the upper BB and its stochastics is going above 80%. However, this assumes an environment with no imminent change in fundamentals. The rumors (hate to mention this) is that Kroger is going to sign a larger contract and Walmart will soon make that annoucement. If I were to look at the chart in the traditional way I would say after last Friday's runup it is going to consolidate (like the last two times) between 9.5 - 10.5 for the next week or so before it moves further up. If OPMRF continues to rocket and move pass 11, then the theory of something immenent in the work will be more valid. I'm sure you have seen stocks of company shooting up with no news and people were unable to explain why - that would be the buy on rumor and sell on news type in making. But in this case if the rumor (especially Walmart) is true the stock can easily double. My three phase (actually four phase) theory for a young start-up that can catch fire: Phase 1 - People buying but take on great risk because they are literally betting that the sound business concept will translate into cold hard cash in the future. Many penny stocks are like that. OPMRF survived this stage and actually sold more and more machines. Phase 2 - Wall Street begins to take notice and its following widens. The evidence will be higher daily volume and more publicity in the local media. OPMRF is being written up favorably by many local newspaper and radio where there is a local store using their U-Scan Express. OPMRF has entered into this phase. It has yet to do seminars! Phase 3 - The euphoric phase like when major contract is announced and Wall street does heavy promotion on the company. The company is mentioned on national publication, TV, CEO invited to CNBC, etc. This is when stock price really caught fire and phenomenon like Netscape, IOM, Yahoo etc. happen. Phase 4 - what happens to Netscape and Iomega now. The late-comers get to eat the misfortune! So the question is should one buy OPMRF Monday morning. This is really hard for me to call since I'm already in. Traders may take a plunge on Monday morning and people fearing of over-valuation may take the profit. Who knows. But if OPMRF continues to move to higher high impressively (close at 11 or better), then the truth will be closer to real good news versus just a flash in the pan rumor. One can average down and up, say buy some at 10, and if it drops to 9.5, buy more, etc. However, I doubt it will fall much below the 9 1/4 support near term barring a major market correction. There just aren't many Peter Lynch stocks these days. Good luck.