Sigmund & Jim,
You are both asking the same question, and both can be answered with one word: INSTITUTIONS.
Stocks that close higher than the open are considered undervalued by institutional investors. Stocks that close at the high are typically under buying pressure, since it indicates everyone that wanted to buy was not able to do so. This typically carries forward into following trading session, until the demand has been met.
Also, institutions make many trades at or near the end of the trading day. This eliminates them from telegraphing their intentions, and it allows them to monitor conditions throughout the day before deciding on their best course of action.
Soneone sold 30,000 shares at the high of $25.25 at the end of the day, but ... someone BOUGHT 30,000 at the high of $25.25 at the end of the day. It wasn't me (this time :o), I don't think it was anyone here (ok, fess up if it was someone here), and it surely wasn't a short. That leaves about one candidate, institutional investors who are buyinh into this company.
You know what that means don't you? $25 has become the BASELINE for their investment. I bet the stock is going to go MUCH higher, and in a time frame shorter than any of us imagined. I don't know how to prove it, but Sigmund has given some very good analysis detailing how $25 was the magic price, at which point institutional investors were given the green light to buy.
I have one word of caution to give, which is that we can probably expect higher volatility, as silly as that may sound. We will probably see more block trades by both long term investors and short-term traders looking for as little as a $1 to $2 gain, more momentum buying and selling, and increased volume as institutional investors begin to shuffle around their pocket change.
I think I'm going to faint :o)
Rugrat Regards, JB |
