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Strategies & Market Trends : STOCKS WITH ATTITUDE TEAM - FA/TA AND EVERYTHING ELSE
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To: Dave H who wrote (861)12/27/1997 2:50:00 PM
From: David Smith  Read Replies (3) of 2377
 
Again, this application of extensive TA to a $3 stock is amusing.

How can you use the same techniques to analyze a thinly-traded, obscure penny stock like AIRM that you would use on a stock like MSFT or INTC? If you want to cite basic tools like volume, MACD, higher highs/lower lows....ok. But to state that Friday's trading in this stock constituted a "breakout in the stochastics across these downtrends and as such a powerful short term move could happen monday/tuesday"...? You're basing your conclusions about a sensitive and important indicator like stochastics on the action in a stock that traded a total of 21,000 shares on the lightest trading day of the year for the broader market. 21,000 shares....for a $3 stock, that's a grand total of $63,000 of capital flowing into and out of this thing. Even assuming that ALL that action was customer and not dealer-initiated (a very generous assumption), 6 individuals using capital of about $10,000 each could have accounted for all this activity. A SINGLE trade that ended the day on a downtick for this stock would have completely altered the stochastics.

Not a lot of information on which to base either investment decisions, or conclusive TA, is it?
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