Saturday Cartoon Question: Who has the most to gain from quick upward ZNGA spike?
The calendar indicates options expire next Friday, and this is the very crowd who would love to push and shove ZNGA higher next week, the strike price of $2.50 being the key number. I suspect they will meet with success and the stock trends higher in the short run. When a stock moves higher in dramatic order at the end of a trading session (as was the case yesterday), just before New York Friday afternoon cocktails, you can best believe the big boys are at work. Keep in mind that none of this has anything to do with investing in a traditional sense, and nothing has materially changed for the outlook of the bull dog. This is simply the way the casino works, especially with beaten stocks approaching the pink zone, because relatively little capital is required to achieve the desired outcome. I would think this is an excellent short term trade, but I don't like participating in a rigged game. Did you ever wonder why stocks often have big moves at the end of a Friday session? When it is to the downside, it is because traders do not want to sit on pent up nervousness for two days. In the case of ZNGA upside activity, the big boys know individual gamblers will salivate over the weekend, some regretting they did not yet jump on the bandwagon. Others will look to double up on positions, and the freight train gathers steam. Clearly, the masses are necessary for this charade to work successfully. It is Newton's Law of stock trading. Inertia does not in this case refer to mass at rest.
In this scenario, the key touchstone of truth will come on the trading session of Monday, January 21. That is when the cards must be shown. There will be no more bluffing. If a reversal of the previous week's gain occurs, then you simply call it for what it is. I suspect this is what happens. No one should be sitting at this table who cannot play a good hand of poker, otherwise you will quickly be turned to fodder. You would be much better off buying Johnson & Johnson, and simply turn the computer off. Did you ever wonder why Greg Merson, the World Series poker champion, always wears dark sunglasses while playing? It is because the eyes never lie. I'll bet my bottom dollar he would be a damn good stock trader. He grasps both mathematical probability and human psychology.
Truth is beauty, and beauty truth
That is all there is, and all there is to know.
Just admit it Balastona; you have never run into a writer as eloquent, accurate and inspired as Odonnell on a stupid "Yahoo Finance Board". The only argument you can offer is a 'paranoid schizophrenic' reference. Maybe its this new moon that has thrown you off course. Go out for a hike today and re-group.
"The world is too much with us, late and soon.
Getting and spending we lay waste our powers,
little do we see in nature that is ours."
Hmmmm...."Technicals and oversold conditions." That's a fairly convenient rationale, and you could pin it on most any stock, especially one with a chart as miserable as ZNGA's. Missing, and this is generally the case with the longs, is any concrete analysis. I would much prefer to discuss fundamental value, and this would not include pie in the sky notions of legal online gambling, which were it ever to come to fruition successfully (unlikely), is far down the line.
Meanwhile, the bull dog will bleed cash at warp speed, and I want to talk about numbers over the long haul. Numbers will not be important this coming week, momentum will. I maintain that ZNGA is a pure gamble and I see it moving higher up to options expiration. I also expect a key reversal on the following Monday. There is money to be made here, but it is not investing, and it most certainly is not investing based on fundamentals. Let's get ready to ramble and gamble. One of us will be right and one wrong. I am not philosophically opposed to his type of gambling--no Puritan here. I just prefer to call it for what it is.
I agree. Good short-term play, but that's all it is, for now. I will say this: IF, and it's a BIG if, ZNGA can make real money online gambling work, this company's stock price will be worth triple digits, one day. The problem is that it could take years, and there's a lot of other, more well positioned competition. But, IF they can do it ... I don't know; I might buy a few shares and just forget about them. You never know ...