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Krispy Kreme Doughnuts, Inc. Message Board

  • masta_beta_kow masta_beta_kow May 22, 2004 2:38 PM Flag

    Due for DEA cat bounce

    The put/call ratio is at extremes. A rally to $25/26 probably in the cards. To suck up all those new "investors". Then back down she goes, sinking faster than the Titanic.

    http://www.schaeffersresearch.com/streetools/indicators/equity_VOLPCRatio.aspx

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    • MastaBeta: I'm not a chart reader (would like to have that skill, but don't have it). But common sense tells me there is an enormous supply of this stock available from institutions and that the rosy glow is permanently off this stock. A rally like you predict could only be fueled by short covering or retail diehards. Perhaps a big part of the increased short position is hedge funds. I suspect most of the posting of shorts here are from those holding puts which is the only way one can short this from many brokerages at this point. I'm suggesting that the put-call indicator in this case may not be so reliable, and that a short cover rally might be very short lived. Some of us with short positions are concerned that if we were to cover, we would have trouble again borrowing the shares to reinstate our position. Everything seems to suggest this stock is going to 12 or less. The institutions can see that too. Any short term bump over 20 may be a last chance for longs to unload and get out with (some) of their capital in tact. In sum, I would suspect a run would peter out before the stock got to 22.

      • 1 Reply to genericwhiteguy47
      • genericwhiteguy47,

        Doesn't common sense also dictate that if
        there are no shares to short, that there
        is a distinct possibility that the "forces"
        are planning on an upward path? Hedgies
        work both ways and could care less about
        company "short-term" fundamentals, its all
        about profit. That's common sense too.
        If covering makes one concerned that they
        might not get the opportunity to short shares,
        my question is why focus on this stock alone.
        Frankly, there are other stocks, which I will
        not bore you with, that make fantastic short
        candidates and "this horse" could turn at
        any moment. Common Sense would indicate that
        one should pay attention to the put-call
        ratio. Even if you don't, surely the pros
        do. I would not be hard pressed in seeing
        this go to 26. Lastly, if you and others
        were so confident that this "pup" was headed
        south, why not buy puts rather than short
        the shares. More bang for your buck! This
        only indicates to me that "confidence is
        waining" in the short-term for "shorts".

    • "Due for DEA cat bounce
      by: masta_beta_kow (18/Los Angeles, CA)
      Long-Term Sentiment: Hold 05/22/04 02:38 pm
      Msg: 92170 of 92179

      The put/call ratio is at extremes. A rally to $25/26 probably in the cards. To suck up all those new "investors". Then back down she goes, sinking faster than the Titanic."


      Why would you HOLD on to the Titanic. The
      movie version?

 
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