In light of today's price move, you might be interested in the comments in the January 11th "Update" issue of The Napeague Letter regarding KAB:
"In mid-December KAB had dropped back to just above $4.75, but then began to show some strength. Around Christmas, momentum-based technical indicators began to confirm this change in direction, and the stock moved up to $5.50 over the next few days. However, although there was a significant increase in trading volume, volume-based technical indicators never confirmed this move. As of the middle of last week, it appeared as though this move was over, as KAB dropped back in concert with the rest of the market."
"However...my real-time quote service gives me quite a bit of information about the number of shares of stock for which there are firm buy orders at the bid and sell orders at the ask. Since KAB is listed on the New York Stock Exchange, I feel that this information is reliable."
"During this recent move, and continuing through Friday afternoon, my
quote service showed that there were buy orders for a substantially
larger number of KAB shares than were being offered for sale. Although
the market price for KAB dropped 3/16 during the day, the buy orders
continued to be substantially larger than the sell orders, and ratcheted down with each move of the market price."
"This suggests to me that there now is newly-developed significant demand for KAB, and that this demand is coming from relatively sophisticated traders with deep pockets soaking up any panic selling, ready to satisfy anyone else's stop loss orders. If so, this tells me to ignore the charts - this move may not be over yet."
An in-depth Analysis of KAB can be found at napeague.com .
Bob Davis
The Napeague Letter
napeague.com |
