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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Dell-icious who wrote (11091)	6/19/1998 12:03:00 PM
From: VINAYAK DAVE	Respond to of 14631

Because it's just Upgraded to Strong BUY at Hermes.

To: Dell-icious who wrote (11091)	6/19/1998 2:22:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 14631

The MM has been taking this stock higher for over a period of time now. I have seen the MM attempt this even through periods of net selling. When the MM moves the price as high as he can, then the price of IFMX will go the other direction, probably back down to at least 7. Once the speculative trading action dries up on this stock which is what is providing the liquidity that allows the MM to manage the stock this way, then the price of IFMX will settle in a more narrow trading range. I do not see the price sustaining a value above 8. This MM is not as gross in his manipulation as I have seen some other MMs. So the trading activity does limit what the MM is willing to do with the price of this stock. The lead MM of IFMX stock is one that is very good at what he does, better than many I have seen. He has succeeded in attracting more speculative trading action to this stock over time since the initial sell off which is opposite of what normally happens in a situation like this. The uptrending end of day volume reflects this. Now that the stock is "alive" and has apparently bottomed and is nowin a sustained uptrend, this has been attracting some more serious players to this stock with larger block purchases. However the amount of larger block purchases compared with the total is still quite small. I am very impressed with this market maker. I just saw the recent analyst upgrade to this stock. No wonder I have seen a recent change in the trading action of this stock. This is probably what has motivated the purchases made by the more serious money and has helped attract more speculators to this stock. This market maker is still impressive. Bob Graham

To: Dell-icious who wrote (11091)	6/20/1998 1:30:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 14631

I think this stock is ready for a move down any day now. Still I would not be surprised if the price moves closer to 8 on the back of the upgrade and the MMs diligent efforts to move the price higher which the upgrade will facilitate. However, the price rise is becoming overextended on a very short term basis. Once the tape action shows this stock fading its current move up, I would write CALLs at 8 and be prepared to write them sooner which can come as soon as next Monday. The technicals on this stock have been improving so perhaps 8 will be hit again before any significant move down is encountered. The weekly chart looks to be improving too, but still does not indicate to me that the stock can sustain a move much above 8. Next week would have to close in a very positive way to change this picture. With the improvement in technicals and specifically the upward momentum of the stock, perhaps we will see price action that will increase the time premium on the AUG 7.5 CALLs. If the premium becomes large enough, I may write a set of 7.5 CALLs instead of trading in and out the JUL 5.0 CALLs on this stock. I do have a software development project to focus on which this approach will help. However,the more this option moves into the money, the less likely this will be to happen. Considering this, I think the best one can expect is the current time premium on the option of one point. Lets see... AUG 7.5 with stock at 8 and one full point time premium yields a option value of 1.5 points. On 1,000 shares of stock, this will yield $1,500. If the stock remains at 8, will need to cover and end up with approximately 1.5 - (1/2 + 1/8) = 7/8 per contract for a total of $875 for the two month contract. If price goes down below 7.5 and near 7 where I would cover, then profit would be 1.5 - 1/8 or $1375 for a holding of possibly less than two months. If I shorted a JUL 5.0 option and the stock remained at 8, I would likely break even to losing a small amount of money. If the stock moves down to 7, I would make $1375. As long as there is time premium left, it will buffer me from an exersize of the option even when OI is low. The advantage to the JUL 5.0 option is I would benefit from a price drop below 7. Also if I am nimble enough, I can benefit from price swings smaller than one point, perhaps as little as 1/2 of a point. Also I will more likely be out of my position if the price of this stock surprises in a negative way since the time duration of my position will be much shorter than if I were to purchase the AUG 7.5 option. But this approach requires much more effort and has more inherent risk. This AUG 7.5 option is beginning to look attractive to me considering the time I have available to follow this stock. I will need to look up when the next earnings report will be coming out. All of this is just my opinions, of course. Bob Graham