Explanation of today's (and other down days) action:
Obviously, just my opinion, but I've seen this phenomenon a million times:
Traders and institutions aren't stupid. If they wake up in the morning and say they're going to initiate or add to their Ascend position, they'll buy at the open.
If they see that bids are being wiped out as fast as they're put up as they have been the past two days, that indicates to them that one of two things is happening: 1. A large holder wants to unload their position or 2. Short sellers are attacking the stock.
In either case, they have no compelling reason to hold the price up. Unlike some of us, they are not on margin and don't care if the price tanks. If it does, they can buy it cheaper.
As for today, there was a lot of selling pressure from the get go. When that became obvious, the only bids in the market were from people like you and me. However, we don't have enough buying power to stand up against a motivated seller. As you may know, when someone dumps a position, they don't sell 10K shares/day for 1000 days. They sell a lot of stock at once.
Note that when the stock hit $32, the buyers said enough is enough and stepped in, pushing the stock back up to $33. It went from $32 to $33 so quickly (actually, not quickly enough for me) as the buyers realized that others noted that the price was at $32 too and were buying at the same time. From $32 to $33, the buyers "competed" with each other for any available stock. When the stock tried to surpass $33 1/2, the sellers stepped up with more pressure. Then, the bids were once again lowered.
I personally don't like the price to swing in a $5 range every single week. However, this is a clear indication of accumulation. There is nothing wrong with this (unless you're margined to the hilt).
Should some news come out that says that Ascend is a screaming bargain, you'll see the price go up $5 in one day. But until that happens, we'll see this trading range for a while. For what it's worth, what it means is that you might add to your position under $33 and sell some of your position over $36, of course, taking the risk that the stock will break out one of these days. Between $33 and $36, just hold what you got and watch the NCAA games.
Again, just my opinion. FWIW. |
