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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Mkilloran who wrote (4954)	12/24/1998 5:11:00 PM
From: AlienTech	Respond to of 43080

Manipulation? What stinkin manipulation. I guess today showed the difference between what making a quick buck by the other side and providing a liquid market means. Rather than opening CNV @ 100 and then taking it down to 10 to cover like some of the other biomed and internet stocks, AMEX closed trading till a balanced number of buyers to sellers could be found. CVF TECHNOLOGIES CORP. (CNV) 7 1/4 +3 1/16.Shares of developer and manager of emerging companies with proprietary or patented technologies are moving higher this morning after the company announced that its Elements subsidiary would launch an e-commerce Web site. These days, just about any company can announce (not necessarily produce anything) that they are seeking space on the Internet and have their stock price triple or more. Accordingly, the stock has opened up 67% from yesterday's close, almost equaling the high of $7 1/16 reached earlier this Spring. In fact, the stock is now trading at a new high on the view that its subsidiary of nutritional and herbal supplements will be a big hit with consumers. Their twist will be to not only sell products but to also educate the public through product efficacy. However, according to the company, its Web site is currently in a test phase and will not be fully operational until March of 1999. Expect another press release at this time as well. It appears that this latter issues do not matter to investors (speculators) as they are again jumping on any company that has any tangent relationship with the Internet. We at Briefing.com hate to sound like a broken record, but here is another example of investors going bonkers over a stock that has an unproven track record. While revenues for the past nine months have risen from $796,000 to $4 million, there are better capitalized nutritional and herbal supplements companies that can do the same. We guess this is not the point. The real point is that anything Internet related is good and its stock is bound to at least double, regardless of the details. (DAYTRADER): Some valuable trading lessons to be taken from early whipsaw action in the Internet stocks this morning. 1) Momentum stocks don't cough up an entire day's gains (usually no more than 60%) unless bankruptcy is involved, even after climbing 390% on a rehashed press release. To be certain, Multiple Zones (MZON 30 5/8 -25 3/8) does not have the fundamentals to support a $56 price or even this morning's low price of approx. $27 3/8. But when a stock exhibits oversold conditions due to panic selling, seasoned traders view it as an opportunity to squeeze a few last drops of blood from the stock. As the intraday chart demonstrates, MZON shares have spiked several times today as traders have attempted to participate in a trend reversal, or at least hop aboard a minor rebound for a 1 or 2 point spurt. 2) Manage those market orders. This morning, PC Connection (PCCC 21 1/2 +7/12) was indicated 186% higher on nothing more than a brief mention last night on CNBC as a possible MZON secondary play. Even on a blowout broader market open, stocks that gap almost 200% (especially those which trade over $10 per share) are usually going to come back down in a hurry, as those who placed market orders before the open have their teeth rattled by the fill. In this case, the stock opened at $38 1/8 and quickly tumbled back to $19. Sure, everyone wants to grab a seat on the next Internet rocket. But be smart about it. One must understand that the majority of stocks which experience such spectacular openings never see that high again Moreover, when dealing with Nasdaq stocks, traders must be very careful not to get ambushed by the market makers. Individuals may help avoid both scenarios through more active use of limit orders.