Holey Moley .... no sooner do I call the stock boring than ETPI explodes like a volcano. I should say this more often, shouldn't I?
What happened? No news!
Earnings? Merger? Again no news. Insiders can't legally buy before releasing news to the public. NOT the answer.
ETPI has a waterpark? We've all known that for months.
Momentum play, you say, EZ ED? I hope that's a quote from your e-mail, ED, because one look at a chart shows ETPI to be the absolute antithesis of a momentum play, i.e., until this p.m., quite dead.
So what accounts for this 70% run-up on huge volume? I hate to type these unspeakable words:
PUMP and DUMP!!
Here's how you tell ... with an intraday chart.
ETPI is virtually untraded until 2:10 p.m. EDT. Then a glowing e-mail from Penny Picks goes out. At what time did you get yours, ED? 2:10?
Between 2:10 and 2:15 >> 70,000 shares traded, nothing is bought higher than 18 cents. The early birds know exactly what to do .... buy every bit as much as they can. The biggest volume of the day goes between 2:15 and 2:20. Appx 115,000 shares starting from 18 cents, going to 23 cents. The smart action has ended. The buyers who were impressed by the big move now come in. Are these the same people who buy at the top on all the internet action? Could be.
Between 2:20 and 2:25, the volume eases but the price moves up to the days high. That's momentum! The second biggest slice of volume comes in between 2:25 and 2:30. If you go to the Angelfire web site, you'll find (use Get Document Information) that it was posted between 2:25 and 2:30. So this volume comes from the 'masses' who follow the Web posting and buy on that basis. They are too late, but their purchases are critical.
For the rest of the afternoon, there is relatively low volume, relatively high price. The volume from 2:25 onward is greater than the volume in the first 10 minutes, still at high prices. This IS necessary. Everyone who bought in the first 10 minutes could have sold in the last 35 minutes. They ALL win! 30-65% profit in just half an hour! What a wonderful investment ETPI is (for them!).
So what happens tomorrow? Probably decently high volume. Possibly good prices early, as the stragglers who had to think about it overnight buy in. Almost certainly downward price pressure from late morning on, as many of US decide that the Sell price for now is too good to pass up.
BUT if Penny Picks decides to follow up its praise of ETPI for the next few days, the price could stay high for a few more days. If ETPI hype messages flood Yahoo, we can hang onto these prices for a few days.
Now the long-term investors have been through this a few times before. 'The Penny Speculator' did it once. Another Web newsletter did also. In the long run, the hypsters go away. The late buyers sell in disgust and then more of them throw in the towel, as their expectations for overnight riches meet 'reality'. The price falls. Those who didn't sell lament the price activity. Management does nothing (again). But management didn't cause this because management issued no news or other overoptimistic statements. (We assume that management is not in bed with the hypsters - no evidence of that exists.)
The big money has been made - by roundtrippers. Volume looks very high becasue the early participants sold as well as bought, double-counting their shares.
The waterpark has nothing to do with anything, except as a hype gimmick. And to someone who said ETPI is the only publicly traded waterpark, check out PKS, Premier Parks, owners of the Hurricane Harbors and well as the Six Flags parks.
Tomorrow life goes on -- and the volcano begins its return to dormancy. |
