--Marvin
You pass along your broker's comment that, There is simply a greater probability of 65 to 70 in AOL for the next one and a half months than a rise from here towards the 90's
Technically speaking, using the word probability in its statistical sense rather than as a word to make someone's subjective guess sound somehow "scientific," there is a lower probability of AOL going down than up over the next month. The probability, based on the average price change for the past month, is about 26% further downside and 74% no further downside, that is, 3:1 odds against further downside. This is calculated using ordinary statistical probability. Which isn't to say AOL won't or can't go down further. It can and might. But those are the current odds. AOL is in a short-term downtrend after an enormous upmove, a very common event. Volume has been low recently, way below the average for the last month. Though no one ever said you couldn't get killed on low volume, I can't put much importance on price movement with low volume. What AOL obviously needs is significant news. Unless some unexpected news occurs, the first significant scheduled news event for AOL's stock may be Yahoo's earnings about January 11. If Yahoo has blowout earnings, it will suggest AOL's e-commerce and advertising revenues will be good and probably move AOL's stock ahead of its own earnings in mid-January.
Best,
--Steve
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