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

To: Charles Hughes who wrote (11112)	6/22/1998 4:56:00 PM
From: Robert Graham	Respond to of 14631

Major Factors: 1. Volatility from the sell off which is still a current factor. 2. By this upcoming earnings report meeting the financial requirements of their Credit Facility. This company does not need news to come out about a lack of credit worthiness and the company losing available credit. Heck, we are talking about the financing of A/R which should be a "no brainer" for Informix. 3. Dilution is still an issue which I think will become more of an issue at 8 or above. 4. I see more significant monies taking nibbles at IFMX when it is in an uptrend toward 8 in the form of an occasional purchase of a 10,000 share or much larger block. These are the longer term holders that we need to see much more of involved with this stock. One positive is that there appears to be more speculative interest that is being attracted to the stock, and the volume validates the current uptrend. As long as the speculative interest is there for this stock, volatility will remain which is good for traders and covered CALL writers. 5. Sentiment needs to change for this stock. I think there is a negative sentiment toward this stock by the market still in place. The overall low volume supports this along with the relatively large retraces made by the price before it continues its current uptrend. As I mentioned above, the volume attributed to speculator interest has increased which is good, but still remains very low for the larger and longer term players. 6. Wins of local contracts in competition with Oracle is important. This will be a big boost to investor sentiment. 7. We need to see a pattern of improving financial health including larger booked positive earnings and most importantly cash flow. 8. Qualifying for a long term loan to finance aggressive turnaround effort would be the next step after validating the solvency and viability of the company to financial and investor interests through a pattern of reported increasing earnings and cash flow. In other words, the company needs to make the transition from "survival mode" to the aggressor pursuing new business. 9. An improved relationship with the investor public would be very nice. 10. For partnering relationships that are producing results that can be seen to impact the bottom line in a significant way. Just some thoughts of mine. #1, 2, 3, 5, and 7 I think are the most important for the near term. Feedback is welcome. As a side note, I have written the first group of contracts as JUL 5 CALLs at 2 15/16. I attempted to write the CALLs at the "ask" which normally do not transact but they did in this instance. This was done while the spread through a change in the "ask" increased which is interesting to me since this happend with no change in the underlying stock price and the order transacted at the increased "ask" price. I think this is some form of advertising by the MM of the options. As a guess, I think he is expecting volatility o the upside, but this is just a guess on my part. Two more groups of CALLs to write to fully cover my stock position. I will hold off writing the next group until after I see how the stock challenges the price of 8. I find it is much easier to sell illiquid options when the price of the underlying is still moving up. Bob Graham

To: Charles Hughes who wrote (11112)	6/25/1998 2:01:00 AM
From: Robert Graham	Read Replies (2) \| Respond to of 14631

Looks like the resistance at 8 has been validated. There was an initial move beyond 8 today, then the price moved back to a very narrow trading range with 8 as the "ask". The volume today was not as large as yesterday's volume. Tomarrow should show a move up or down. If a move up fails, then I think the stock will be moving down. This is when I will be writing more options. My target price will be 7 for this option play. But with the recent strength of this stock, there may be no significant selloff but just a smaller pullback followed by a rechallenge of 8. If this proves to be true, then I will be looking to write the AUG 7.5 CALLs for my next round of options. I think the price will pull back tomarrow and go to at least 7.5 or less. So I think with deep in-the-money options I can make at least 1/2 of a point in a few days. This will be tricky. There is also a chance it will pull back to 7. If the price moves back to 6 3/4, the selling is not over with for this stock and this would be a negative indication for the stock that there is not any solid buying interest. This would indicate that much of the buying has been done for the very short term speculation of this stock. If the stock move back only to lets say about 7 1/2, and larger blocks step up to purchase the stock, then there is solid buying interest for the stock, and this stock may be heading above 8 on the next move up after the pullback. I have not seen much evidence of this type of buying yet, but the pullback can be revealing. Just some thoughts. Bob Graham