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Microcap & Penny Stocks : lcav
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To: Cisco who wrote (72)8/26/1997 11:27:00 AM
From: Harry W. Lowe   of 942
 
Cisco,

Your reasoning is correct, a thin float does cause problems in TA. It also results in a wider spread taken by the market maker, which has been a problem with this stock in the past. One benifit of a thin float has been that the price will move with greater volitility and greater percentage moves than with increased supply of stocks.

TA works best when the price is controlled by supply and demand forces. And, this process is more efficient when the supply of stock available to "public" is sufficient to move the price through buy/sell activity; which is not the case in 'thinly held issues'.

Your calculations are interesting and easily verified. Thanks for the information.

There is a good opportunity to make a lot of money on a short term basis in this stock. The price moves are perdictable, the percentage per move is great (e.g. a $0.50 move for a $3.00 stock is 16.6%; that's equivalent to IBM at $105/sh. moving to $122.43, and in a shorter period of time). I have traded this stock with great success and will continue to do so as long as the technical picture is clear, and my trades are successful.

For the record, I currently have no position in LCAV as my current trade posture is governed by the general market conditions (which I believe to be in a short term negative trend) as well as the technical factors for the stock in question.

I will continue to advise this thread on the technical factors for LCAV as long as there is interest and adequate response and the dialog remains constructive.

Thanks again for the information and your comments.

Harry
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