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Biotech / Medical : Lidak Pharm. [LDAKA]
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To: luis a. garcia who wrote (41)1/4/1997 2:33:00 PM
From: John Zwiener   of 1115
 
If you look at stocks, some of these stocks develop patterns of low volume with episodes of high volume. A slowly increasing volume as a stock price holds steady or drops seems to mean that someone is buying. At some point the buying causes a supply problem and there is not enough stock to supply the buyer--the price jumps up. Everyone notices this and starts to buy the stock on heavy volume. Meanwhile, the guy who was buying the stock over the previous few days or week starts to sell into the price jump.
However, if the volume does not go up when the price increases, then people seem to think that the price might go higher and are holding onto the stock.
You might interpret this differently, and we all have heard that a price jump on heavy volume means that the stock is taking off. But how many times have you bought into a stock that had gone up on heavy volume only to see the price retreat. There are variations of this depending on if there is very good news or no news.
Now if ldaka does develop very high volume, that's not necessarily bad, but chances are that the price will start to drop as more people are willing to sell at that price. As the price drifts back down and volume decreases, I watch for volume to pick up to signal interest on the part of buyers.
If you look at ldaka's chart, you will see two distinct step ups associated with increasing volume just before the price went up. You will see the 1st jump ended with high volume. I think this 2nd jump has not ended because we have not been met with selling. It's also possible that we are seeing the beginning of the classic step up pattern associated with a long term run.
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