Hey, we had some serious volume at the bottom. A lot of shares traded over a several day period in the 2.5-2.625 range. In my opinion what happened is that we fell into a long slide which induced fear in the hearts of holders. Many started thinking things like "why do I own this dog?" or "why doesn't management do something?" or "I'll sell some now, and then buy back once it starts back up". All these negative vibes led to a steady flow of selling. Buyers held off waiting for a bottom to form before jumping in. Probably the redeemable holders played their cards and sold some shares helping to keep the downward momentum going, enough to squelch any rally.
Eventually the stock reached a selling peak a few days ago when the volume hit 600k. Since the redeemable floor is $2.50, buyers began coming back as the stock neared $2.50. Heck even I bought a few more shares, and I already have plenty. Once the selling subsided, it became clear that the stock had bottomed, and two good things happened. First buyers who had been holding off came back, and secondly, the fear disappeared, causing selling to dry up. The predictable result was a nice bounce. Stocks in this condition are "oversold".
How high will this bounce carry us? At least to 3 1/8 in my opinion, perhaps as high as 3 1/2. Will we have a retest of 2 1/2? Possible I suppose, but given the extended and gradual nature of the fall, and given the broad bottom I would rather guess that the stock will hit 3 1/8 or so and move sideways for awhile, building a base for the next run up in anticipation of going live. Of course if we start seeing some filings indicating that there was some insider buying at 2 1/2, the train could leave early. It will be interesting to see if any insiders took advantage of the buying opportunity.
Please examine this graph for a perfect example of how I expect Ampex to behave from here:
techstocks.com
Note the long decline, the sharp jump, followed by a feeble attempt to re-test the low, and then a continuation higher.
Carl |
