AJ, You are absolutely right. The daytraders played WAVO all day today. Once we learned it was scheduled for CNBC tomorrow, everyone grabbed up shares. Here's the theory. It gets talked about on CNBC at 8:10am, creating all sorts of interest because, guess what, it's an internet stock and those things are really soaring. So all the longs go in and place market orders before open. Price runs up and the daytraders sell all of those shares they bought today at the close. Then they short into the rally, ride the stock down, cover the short, buy it back, ride it up again, sell it, short into the rally, ride the stock down, buy it back, ride it up again... blah blah blah.
If you want to play WAVO, do NOT:
1) place a market order before open
2) buy at the open. wait until the traders sell off, causing the stock to "shake" down and buy it then
3) hang on to it too long. set a price target and sell the sucker into the rally. be happy with whatever you make and don't get greedy.
it may climb higher, but it will come down. if you have any doubts, just look at BAMM, BIGE, SHRP, NAVR and all of those other internet quickies. Most (not all, most) net stocks give you a 2-3 day ride, nothing more. Then you buy it long and park it.
I like WAVO. I am holding it after picking it up late today at 14. I plan to sell at the open and then buy it back when it shakes down. I'll then park half for the long haul and sell the other half into the next rally.
Kath |
