Re "support at $25"....
I'm not sure I would agree. One of my favorite methods for determining support and resistance levels involves plotting the volume of stock bought at each price point. This gives a hint as to where people sunk money into the shares, and a hint as to where there may be buying or selling pressure based on "break even" considerations.
This is automated at
bigcharts.com
Can't give you a URL to the complete solution, but click on that URL, enter the stock name, pull down indicators and select "Price to volume" for the upper indicator and, just for kicks, "Money Flow" for the lower indicator. Then click on Draw and look at the chart. The default period is one year, which in the case of QWST corresponds roughly with its growth period.
(Seriously, this takes less time to do than it does to read about it.)
The chart shows that a lot of people bought in at $14, and again in the $31-33 range. It also suggests that below about $27 or so there is very little support.
Of particular interest in this specific case is what the MFI indicator trace tells us. Notice the month of March (1998). The stock continues to go up, while the MFI has begun a fairly serious drop off. One interpretation of this is that the institutional (so-called "smart money") began to bail out in mid-March, and that the price was upheld through mid-May by retail (small lot) buying.
Had I noticed this in mid-March, I probably would have sold my modest holdings. Since I didn't, and still have the stock, I am less sure about what to do. But this exercise has made me a bit more concerned over the *immediate* prospects for my QWST holdings.
JSb. |
