Sometimes people will buy when prices go up because
they assume that a new stage of momentum is setting in. But meantime it is necessary to wait for a confirmation. A stop-limit order to buy at a particular price, for instance, implies that if some specific overhead resistance is overcome, then a "buy" at the higher price makes sense.
I look at it as trend identification. Trying to pick the trend-change is contingent on careful price and volume observations; but of course at the very best, it is an imperfect science.
I will add to my OE position if there are positive management reports or when I see the appropriate shift in trend. Right now I still see more downside in OE. In fact, if new buyers don't show up soon, I would expect more stockholders to sell out. As volume lightens up to the degree it has, there is almost no price support left. That is the current situation. Furthermore, as OE price approaches the bottom limit of what many brokerages consider to be the least marginable of securities, even reluctant sellers will be forced to unload. This process should terminate in a volume climax.
If anyone is undecided about whether or not to sell holdings at this low level, I would imagine that the percentage weighting of OE stock in their portfolio will determine the threshold of anxiety. If the anxiety level increases, you can count on liquidation.
If we get a reversal here, which is certainly possible, then the price and volume should confirm the mid $4.00 level as a good base. But finally, keep in mind that low volume and quiet trading can continue for some time before we have any indication of direction.
Absent that kind of promotion and/or news, we should reasonably expect continued slow erosion of price quotes in OE. |
