I rest my case from last week concerning the risk involved in DWCH. The stock has been in Stage 4 since last July (see article below). So-called "fundamentals" may be there, but these "fundamentals" are hyped by the same LL that is trying to unload the stock. That same LL is now talking about possible "buying opportunities" around 1.80.
Where is the bottom? Is the company viable? The only people who do know can't be trusted to give honest answers. However, the stock chart is there for everyone to see, and it has been in decline since last July. Trying to guess where the bottom is can lead to real grief. 5 looked cheap for awhile, 4 looked cheap, 3 looked cheap. Ones now looks realistic. Wallpaper is a lot cheaper, and DWCH may ultimately serve the same function.
If the company is indeed viable, its stock will recover, and will present many opportunities for profit. For now, there hasn't been a glimmer of hope for quite some time.
The article below can be found at iqc.com
You might have to back up to www.iqc.com and register, but it's a free sight and contains a lot of information. The TA charts are real nice.
What is Stage Analysis?
Stan Weinstein [Ref 3] developed a theory (based on his
observations) that stocks usually go through four stages in
order. Stage 1 is a time period where the stock fluctuates in
a relatively narrow range. Little or nothing seems to be
happening and the stock price will wander back and forth across
the 200 day moving average. This period is generally called
"base building". Stage 2 is an advancing stage characterized by
the stock rising above the 200 and 50 day moving averages. The
stock may drop below the 50 day average and still be considered
in Stage 2. Fundamentally, Stage 2 is triggered by a perception
of improved conditions with the company. Stage 3 is a "peaking
out" of the stock price action. Typically the price will begin
to cross the 200 day moving average, and the average may begin
to round over on the chart.
This is the time to take profits. Finally, the Stage 4 decline
begins. The stock price drops below the 50 and 200 day moving
averages, and continues down until a new Stage 1 begins. Take
the pledge right now: hold up your right hand and say "I will
never purchase a stock in Stage 4". One could have avoided the
late 92-93 debacle in IBM by standing aside as it worked its way
through a Stage 4 decline. |
