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I think some of the denizens of this thread interpret a bandwagon effect to be manipulation. There are players who understand the rules and those who don't. If those who can move large amounts of capital around are playing by one set of rules, and you're not attuned, it can be disaster. Point one: internet advertising stocks (YHOO, AOL) have benefitted from the exodus of capital from tech stocks seen to have greater exposure in Asia. Two: Nobody with a large gain this year wants to realize that gain before the end of the year, for tax reasons. Three: In the face of this, shorts are giving up the ship and taking the loss against this year's income, again for tax reasons.
The relatively small float and the uptick rule have aided the longs, in that small volume can move the stock tremendously, but shorts can't move it beyond an uptick and the availability of stock to borrow.
There WILL be a reckoning, but it is difficult for anyone to maintain their conviction in the face of withering fire such as the momentum the internet advertising stocks have seen. Having deep pockets helps as well.
Last year, it was the routing equipment stocks that were having this type of run. For instance, look at ASND's run leading up to year end, and then earnings on 1/16/97, in which they beat consensus by 1-2 cents per share.
ASND's three-year chart: dljdirect.com
COMS' three-year chart:
dljdirect.com |
