It looks like a lot of the "secondary" stocks are showing weakness now. Probably related in some degree to tax loss selling. I would not be too concerned about the meandering price especially when there is no pickup in volume on a follow through to the downside.
In fact, the more time that is spent in the meander, the more discouraging things appear and the better the opportunity. A way of putting it would be to say that the stock becomes so completely sold out that only positive news can effect it and this from new buyers. Many have already said that they were waiting for developments, waiting for 2.00/sh etc. Meanwhile, those who have been quick to sell have been long gone. We are now seeing the tail end of the tax loss sellers.
About tax loss selling (see my post 3553), I have been studying the long range charts and have some observations.
First, the .75-1.00 range is very important to AXC the stock. Most of 1994 was spent at this level - June 94 through Jan 95 to be exact. What happened then was a rally in mid February 95 which attempted a broach of the 2.00 level but failed. Shortly after the rally continued on throughout the year and stopped at the 4.00 level in Jan 96. Again in mid February 96 the rally hesitated at a new level of 5 and then continued to the blow off high of 15 in 96.
The observations I note here are the mid February pivot points for this stock when coming off from the lows. Three factors may be at play. First there is the up side of tax loss selling and the January effect (please note that the January effect can occur anytime from the last week of December through the following April). Second, there is the fact of coming up from a low - or a sold out condition ie. "low". Third, there is the announcement effect of the 10Q reported in mid February (realize that AXC at it's relative low will have poor information transfer due to lack of analyst and press coverage and lack of general interest for a so called "dog").
In contrast to this, see February 93 and February 96, there was no "January effect". In each case, prices were relatively high, attention was riveted and strongly followed by public participation.
What may be happening is that the combination of being sold out, a January effect and news interpreted as positive, sets a trend in motion. Once begun, the trend will run it's course and AXC the stock will temporarily detach from Ampex the corporation. Mr. Market goes into his manic stage. Where the stock price ends up is anyone's guess. However there can be sign posts along the way. More on this at another time.
Going forward to 98, a strong rally did occur in late January, and it looked like a base was forming in the trading range of 2.00 to 3.00 during Jan through June 98. Unfortunately, the price level of 2.00 which was important in 94 through mid 95 gave way in mid 98. Prices then declined to where the were in 94 to the .75-1.00 where they are today.
We have been below 2.00 for about 5 months now. If we stay below 2 through mid February that will be 8 months at this low base level. This would be quite a sufficient base to act as tightly coiled springboard for a whopping big January effect rally occurring around the time of the February 99 10Q. Remember, there are a lot of lurkers, momentum players, index fund positioners and day traders waiting for the sign to begin the festivities.
On the business front, from Ampex the corporation, the MicroNet DataDock 7000 plus the MicroNet newly announced line will be in the channel, Michael Cooper will be assuming a much more visible role, and the makeover from Imagio may be underway. In sum. There is enough here to get a decent announcement effect in the February 99 time frame.
To be continued.
Ed Perry
to follow this chart discussion try:
bigcharts.com |
