William: DA DUM, "Charge out of company." Heh! Good one. Where do I think VLNC will go, given no conclusive read on the last couple of day's trading? Hmmmm.....although I'm not a seer, if you take the general Streets point of view, and I view it as one without a lot of knowledge of VLNC particulars, then you've seen VLNC drop a goodly percentage on no news with. Typically a drop on large volume with no news is a strong negative indicator, so as a general Street investor you ain't about to jump into an unknown situation, eh? Indeed, all publicly available documentation lends credence to the negative hypothesis. So you stand on the sidelines and, at best, watch. This "sidelines watching" is probably the reason why volume has returned so rapidly to normal. Last weeks large volume MAY have been because of a panicky large investor, it MAY have been general market conditions related, and then again it MAY have been MM's playing patty cake. I happen to think it's probably a combination of all three. Oh, I almost forgot, it MAY also be because something's gone drastically wrong inside VLNC and the volume sell-off was telling us something obvious. Although it's a possibility, I tend to discount it.
As for where it's going, me thinks margin calls generated towards the end of last week MAY keep VLNC depressed for the next couple of trading sessions. Why? Brokers margin calls usually have a 3-5 B-day interval(depending on the size of the call), and for those called who may be holding on gambling the price will move back up.....well....as you can see it hasn't moved up all that much....so I expect some margin calls to get exercised. If so pay particular attention to the last hour as that's typically when calls get initiated by brokers. Bottom line? The stock will most likely trade in a tight range of $4 to $4 1/2 until such time as positive news is forthcoming from VLNC. I myself have another buy in at ~$4, but if you're waiting on the sidelines for an entry point I advise waiting and watching these next couple of days(remember the margin call hypothesis), you might just find a sweeet proper entry point.
Regards!
John~ |
