Here's my humble response to your inquiry and those of others, though I will preface it by referring everyone to Wahoograd's posts. In my opinion, Wahoograd has historically been 100% honest, balanced in his treatment of the facts, and informed--primarily because he takes the time to ask questions of the company itself, understands the technology, and realizes all of the dimensions of implementing WAVX's business plan.
My sense is that the next significant piece of news will either relate to National Semiconductor, major content-provider deals, or receipt of revenue from the ITG joint venture. Each of these could increase buying activity in the stock. An OEM deal also could come at any time, though Wahoograd seems to suggest this will be a later development. However, since OEMs compete with one another, I would not be surprised by one OEM trying to get out in front of the others. The NYC PC Expo in mid-June and the Fall Comdex show in Las Vegas, I would imagine, are the most likely times for announcements, but there is no magic to all this as mentioned below.
As for your question, at any given moment, a company's stock price reflects the weighted average sentiment of long-term investors, short-term speculators, and day-traders. The later category includes your so-called "momentum players," who are reported to jump on a trend without even looking at the news or fundamentals driving the trend, and then jumping off just as quickly. This collective sentiment, theoretically, is what gives form to the charts reflecting trading activity. Particularly in a thinly-traded stock, the market-makers' philosophy, the stop-loss orders, and the mood and needs of key players in the stock also affect trading activity from moment to moment. This is over-simplified and sprinkled with my own non-expert opinions; this is not science, per se. Others may wish to modify it or elaborate upon it.
Right now, with no news this morning and the E3 conference over, many short-term traders are looking to cash in on their profits and put their money to work elsewhere. In my view, the support level that seems to be forming at $4.50 and the modest volume associated with this selling suggests our stock has acquired a relatively large percentage of confident, long-term investors as compared to short-term traders. I think this is a plus.
There is always the temptation to sell during these times. Everyone has to make their own decision--is this a short-term play and you see something better elsewhere (e.g. DocStone's philosophy)? How much risk can you take on (are you on margin)? Will you be unable to live with yourself if your paper profits evaporate, temporarily or otherwise? Are you now less optimistic about the long-term prospects of the company for any reason?
The major problems with selling now in order to try to play the ups and downs, I believe, are as follows: Further news could come at any time. These events are developing quickly and there is absolutely no guaranty the announcements will only come at "natural" times. This product has potential internet security applications as well as consumer applications, and the former market is relatively unconcerned, I would imagine, with "ideal" market launch strategies. Also, a major investor could decide (after digesting last week's news--which will not occur over one weekend, btw) to start accumulating a large position. If you're on the sidelines when these things happen, your re-entry point will not likely be below current exit levels. As I recently discovered, even if you are aware of the move as it happens, there is no guaranty your order will be filled at the prices you see on the screen. Finally, unless you are trading in a tax-deferred account, repeated ins-and-outs cause the recognition of taxable gains in this tax year, rather than next. This causes, of course, a net loss of funds for investment purposes. And, naturally, those gains are not eligible for reduced capital gains tax treatment.
I am not at all surprised by today's developments. The volume is light and the percentage drop is very modest in relation to the recent upward movement in this stock.
Best of luck to everyone.
Pure Folder
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