"However, I have seen too many charts of low priced and small cap issues to see that these charts do not behave in the same way as higher priced and more liquid stocks. So it has been my personal experience that the trading action on small priced stocks is generally markedly different than that of higher priced stocks. "
Sure, they move further and faster. Fear of failure drives many traders, look at the exit on close of daytraders, the same fear exist with stocks that move faster than their capabilities. The TA is the same, you just get more bang for the dollar. What is illiquid to you? You don't run a mutual fund, do you?
You can't make a purse from a sow's ear. The cheerleader/story/news stocks of SI aren't the ones I am talking about.
"I find much of the time the thinking by those who play this type of stock goes: "Heck, this stock is *cheap*. "
Notice That the reasons you gave for people buying aren't TA but those of FA or irrational behavior. Who cares about CEOs and the pap fed to the public. Price movement is the only thing that counts, and you don't count points, you count %s.
Dell goes from 83 to 87, 4 points nearly 5%. now scan for how many stocks beat that, note prices and volume.
BTW: the reason some use the old classic TA indicators from the futures world is they deal in decrepit high caps, neither has high % moves. Futures do change money wise because of margin. |
