What a riddle this stock is. The dialogue on the threads points to investor weariness, and investor wariness. Potential good news (in which there is little to suggest any danger) is greated with cautious scepticism.
Technical analysis gives contradictory signs: but then it should. The Acqua deal has the effect of skewing the technicals to the point where we have to imagine what they would look like in the absence of the deal.
The combination of TA and FA, together with the timeline of product development news, suggests that the next year should be excellent.
Wolf, my question on cash draws was directly related to the likelihood of future draws from Acqua. The reason I asked that is because it is the ONLY significant subtractor to share prices that I can see in the coming year.
On that, there seems to be 2 views:
1 - If the good news comes soon enough, the effect of Acqua draws will be insufficient to stop the share price from climbing
2 - If the good news does NOT come fast enough, then we could perhaps stay in this trading range, or revisit ~$4.
IMO, the Acqua deal gives you quick pain, right away; but you don't have to wait out the delayed effects of a distribution, as players sell cheap shares into the market, later. And there is no dilution.
I have been in stocks where the initial investors have seen the value of their investment drop by 50% thru dilution: ouch.
In balance, this cup looks half-full. Some charts:
A Ribbon Chart:
stockcharts.com[w,a]dallyimy[de][pb50!b60!b70!b80!b90!b100!b110!b120!f][vc60][iUd20!Ub14!Ll14!La12,26,9!Lp14,3,3!Lc20!Lf]
From about mid-September, a massive distribution. Up to that point, it looked like the MA's were going to flatten out. Instead, they dropped. Not a healthy-looking chart, especially to those who think that MA's are important.
90-Day Chart -
stockcharts.com[w,a]dallyimy[db][pb50!b60!b70!b80!b90!b100!b20!b200!f][vc60][iUd20!Ub14!Ll14!La12,26,9!Lp14,3,3!Lc20!Lf]
A shorter version of the chart above - here you can really see the effects of the distribution. Some of the MA's are starting to bottom and rise. The DMI (ADX) has crossed, and has just started to turn up, with +DI over -DI. MACD has not crossed over, stochastic is climbing, and RSI is turning weakly positive.
The Daily -
stockcharts.com[w,a]dallyimy[dc][pb20][vc60][iUd20!Ub14!Ll14!La12,26,9!Lp14,3,3!Lc20!Lf]
Confirms much of the above - a stock in distribution, that almost acts like one in accumulation!
The Weekly -
stockcharts.com[w,a]wallyimy[d20000101,20011231][pb200!b20!b50!b100!f][vc60][iUd20!Ub14!Ll14!La12,26,9!Lp14,3,3!Lc20!Lf]
Contradicts the above. Shows early December in weak accumulation. Shows the ADX headed down (though with a possible crossover). RSI struggling to 0. MACD just coming up from the depths. Stochastic rising.
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If we can maintain volume, and "burn through" the rest of Acqua's deal, we should see a pop above $5.25. If volume holds, we would then go into heavy accumulation - probably to the $7+ area.
Considering that we're in tax-loss selling season, and Acqua (the three A's) is distributing - this is a very strong showing.
I think we could do it by Wednesday, maybe Thursday, if the market's willing.
Very "iffy", but there are signs of strength. I don't think most TA players (especially in this market) would touch DMX. For new investors, a gambler's play; based more on the imminence of good news, and FA. For longs, signs of the end of the beginning.
Regards, |
