No doubt they ARE less committed, on average.
The buy on open folks believe "it's going higher" because others like themselves will rush in based on whatever's causing the excitement that morning, not because it's fundamentally undervalued. Usually the item is vaporous: Maria Counts Down to Blastoff, Dead Fish Raises Target, Gu Ru Likes the Stock, Fan Spins, etc. Once this bet plays itself out, they have no strong conviction about the substance of the company, since they've done only cursory research.
They are 'impulse' buyers, not the type that reads Consumer Reports. <g>
I interpret a consistent pattern of gapping up and then selling down during the day as distribution from strong to weak hands.
The implications for other high flyers with similar trading patterns are probably negative. The very fact that so many of them look the same is a clue that the buying isn't based on company-specific analysis. For most of them, including Kopin, this has been going on since the low of late October.
The ratio of opening gain to total gain is at a new high for Kopin, while the stock is past its peak (short-term, at least). I find that surprising; I suspect that this instance is atypical. Ideally, one would like to construct an indicator that provides a bit of lead time, but even if that can't be done, it might be worthwhile to track the ratio versus stock price over time as a gauge of investor sentiment.
WT |
