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Jim, <<US. stocks and type in LIXX>> I can't find any stock with the ticker LIXX. The point of my comment was the behavior of stocks that had significant distribution (selling, short selling, or dilution of many reasons). When the distribution ends, bottom feeders (guys like me, mom always said buy low) begin to load up on the beaten up stock. The stock begins to rise. However, profit is profit and many will be happy for 20-30% profit (the S&P doesn't do much better) and sell into the strength (the rise in the morning, fall later in the day). Day traders also play for their penny a share. At some point the market becomes aware that the stock has bottomed and future buying will cause appreciation, there are lots of TA tools to help with that understanding (here's one: equis.com ). Then buyers begin to pile on, they are always willing to pay more for something if they believe it's going higher (make profit from 20-80% of a move and leave the rest 0-20% & 80-100% (the risk) to others, it's the safe play). When the herd all piles on, the stock grows exponentially (i.e., can double each day or two.) Even the momentum players get in for a quick play. Eventually all good things come to an end and there is a large selloff (retracement to approximately 1/2 the move). Fundamentals don't mean much during this play, just the feeding frenzy. Remember that ORXX doesn't have many fundamentals. However at some point the market will value the company based on fundamentals, they either show profit or fold. I know my explanation was simplistic, sorry, but I don't want to write a book. Gary may have some other comments from his experience. |
