ECLP.
Ron,
You hit the nail on the head. This is nothing more than a bottom fishing chart play. The stock held at 15 1/8 the other day and rallied up to about 17. It's back down to 15 1/4 again. The bids are strong relative to the offers on Level II. There's more demand than supply for the stock at 15 1/4 right now, both in terms of the number of market makers and their displayed sizes. For example, on the bid, there are four market makers at 15 5/16, four at 15 1/8, and nine at 15. INCA is showing 3700 at 15 1/8. On the offer, there is only one market maker at 15 7/16, one at 15 1/2, and one at 15 13/16 and they are all showing small sizes. They play games with the size sometimes, but its hard to play games with the number of market makers. Given the supply and demand, it looks like a good risk from the long side with a close stop.
I don't know enough about the fundamentals to understand why it traded from 20 to 30 3/8 in April; back to 20 eight days after trading at 30 3/8 on April 22; up to 33 on July 15; and all the way to 15 recently. It seems to me that this is just a very volatile stock that overshoots reasonable targets. It could have something to do with only having 32 million shares outstanding and an average daily volume of about 400,000. |
