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One possible scenario:
As has been pointed out AXC has been in a clear downtrend for 22 days. What if it started out so innocently....
....one day the specialist, aware of the action or lack of action surrounding the Maxtor deal and the presentations scheduled for AXC by PMG, decides to accumulate some inventory. In the process of building up his/her inventory, he discovers the most interesting thing: each time he lowers his bid price, even by an eighth, he gets a lot of retail selling, kinda like turning a light on a room full of cockroaches and seeing them scamper for the darkness. As he continues to lower his bid price everyday, he gets more and more retail selling so he merrily goes his way scalping an eighth here and a quarter point there. He may even have snagged a few profit-taking institutional holders along the way (the Individual Investor Group trusts comes to mind). And he also discovers that so long as the volume remains below the average daily volume, he can usually lay off the inventory he accumulates early in the day at slightly higher prices.
He knows that at some point he's going to set off some trendfollowing screens. Hey, he might even have tipped off some of his friends and relatives to daytrade this puppy. And the beauty is that even if he gets caught with his inventory he wouldn't really mind so long as he keeps it manageable because he knows and probably sees the upside in this stock just like us. So the downtrend feeds on itself. What is interesting, though, is that I agree with some who have pointed out that more and more of the technical indicators are pointing to an oversold condition.
Meanwhile, we suffer the equivalent of the chinese water drip torture test of our assumptions. And the more you are comfortable with the fundamentals, the longer you can hold out before,god forbid,you end up like Salim and Norman hysterically screaming about their losses and generally making fools of themselves on their way out. You watch, Norman is going to come back and use the negative shareholder's equity as some kind of rationale for his selling. |
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