tscn.com
Some technical analysis:
In the weak period for this stock(about August to October), the moving average acted as a ceiling as it often does for companies in a slump. The price kept bumping its head on the ceiling and was keeping it down. There was no reason to move above that ceiling until the bustout pushed it above the ceiling level. You need high volume to bust out. We had it. This is important for you who watch newby stocks. If it busts out over the moving average ceiling on HIGH volume, then you can be pretty confident that the moving average has changed from a ceiling to a base. Not always the case, but often.
The moving average for CDNW has been climbing nicely since the bustout. The price will not want to get too much ahead of the base. When it does, you can pretty much bet, it will come down. Again, not always the case, but you can be pretty confident that the price will want to keep in line with the moving average, but not go below it. CDNW's current price for the moving average is about $19-$20. Most of the time, the test of the base is not directly ON the base. It may if the stock is weak and wants to try and bust down through the price(similar to busting up through the ceiling on high volume). CDNW is not weak with the current holiday sales report looming, internet stocks being hot, and news of a possible investment from Time Warner in the press.
We will not test the base of $19-$20, but may get near it at $21 to $22. As the moving average continues to move ahead at a pace of about $3-$4 per 2 weeks, the moving average will at least be $22 to $23 by the first week of January. With the acceleration in price and interest, I suspect the moving average to move more like $6 to $7 in the next two weeks, providing a nice base at $25-$26.
The people who think we will go below our moving average now with no weakness in site are not thinking logically or technically. Thursday's close is about as low as it will go, so loading up would not be illogical.
The price will definitely continue to be volatile, and stay above the moving average which is a solid concrete foundation for more upward movement. Keep in mind, quick moves upward will want to come back to the moving average though. We have not had a nice spike in a couple weeks, so we could see one here this week as more information comes out on the TWX news. Even if it does not happen, TWX will get more heat this week to get involved in e-commerce. So, the fact that CDNW and TWX are being mentioned in the same sentence will automatically boost the price of our shares. We have yet to boom since many people were out of town late last week and may not have noticed the speculation. That will be a different story on Monday and the rest of the week. You can't...you don't, just shrug off an undenied report that THE media giant, TWX, is interested in investing in or buying out CDNW, our company.
I think it is completely reasonable to see $30 this upcoming week and to see $40 by January 8th.
12 month target would be $117(this will be the moving average base price). This takes into account an $8 move per month, consistent with the current trend of the moving average monthly moves, and a base of $21 today. 12 months X $8 would be $96. Add that to the current price of $21(off moving average), and you get $117.
JMHO,
Miller |
