Chung,
The volume today was significant only by its absence, about a standard deviation below the monthly average and that average itself low. The price change today was not statistically significant, about a half a standard deviation below the average daily change for the past month.
You comment that analysts screaming buy now will risk being labelled idiots if AOL keep going down What's interesting to me is the large number who have indeed been screaming buy recently--and getting no reaction. Volume keeps withering, price keeps sliding.
Even AOL itself thinks the stock is going higher. After all, if AOL wants 6 billion shares authorized, over 3 times the current authorized number of shares, they must think those shares would let them split the stock twice, which at current levels would price it at $22-1/2. Companies usually want their market price in the roughly $50 area, not so expensive it's out of reach for individuals and capable of absorbing institutional buying--and still the stock languishs.
The low volume tells me people are not yet fleeing the stock, just indifferent to buying it. For the moment anyway, the thrill is gone. The right kind of news--whatever that turns out to be--could light a fire here.
Best,
--Steve |
