Monday, July 23, 2007

Update IMAX

It amazes me just how quickly market sentiment can change! This morning IMAX was upgraded to a buy from hold by Merriman Curhan Ford. Analyst Eric Wold argues that, "Once Imax reported fourth quarter and first quarter results, the focus would return to the company's fundamentals -- signings, installations, and box office -- all of which have remained strong."

In response, IMAX proceeded to gap higher through the $5.00 resistance level and run as high as $5.18 in early morning trading. As this story continues to develop, those 5.5 million shorts should really begin to feel pressured to cover. Realistically, shares could run as high as $5.30-40 before overhead supply is really felt. Although, as long as there are plenty of fresh longs available to absorb this supply, IMAX could conceivably run even higher.

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