It doesn't matter, IMO, whether it's a Bulletin Board stock -- the key is the liquidity and volume of trading. TA, the way I define it, is an attempt to objectively determine (much more easily in retrospect than prospectively) the levels where investors, collectively, will buy or sell the stock. It's an attempt to measure collective sentiment in order to explain or predict stock movement, nothing more. At what point does a stock "feel" cheap or expensive to the total body of shareholders and potential shareholders? (Whether they're "informed" or not doesn't seem to matter IMO.)
Any statistical analysis requires a sufficiently large sample in order to be valid. (Sorry, I've forgotten some of the other jargon.) In my experience, the inefficiencies of the BB are minimized, and TA starts to work, once the daily true volumes consistently exceed 150,000 to 200,000. SETO, IMO, is just about at the point where TA should work SOME, but not all, of the time. Starting 2/5, daily "reported" volumes (but not "true" volumes) have exceeded 135,000 shares on 8 of the 11 trading days, and the 3 light-volume days have been down days. That's a classic pattern.
Let's see what happens. This won't prove definitively that "TA works on BB stocks," but my reading of the chart suggests that SETO will not drop below .53 and will have a significant upward move -- maybe to the .70-.75 area -- within two or three days. Good luck to all of us! |
