<<< heavy resistance between 2 and 3 >>>
Unless there is an information leak regarding pending announcements, the current move from the bottom is occurring in large part on technical grounds. If anything, the WSJ comment in "heard on the Street" at the end of Dec. may have been the catalyst.
While today's volume should have been larger, on the other hand, most of the day's movement occurred toward the final hours of trading. We should see more price follow through on Friday.
Friday's volume may not expand significantly. It appears that one of the quirks of AXC is, when coming from the quiet lows, a tendency to churn with relatively higher volume while at a resistance point and then make a move to the next resting place (Eg. see 5/11/95, 7/11/95, and two times in Feb 96). Otherwise, volume seems to follow price, as it should. The explanation may be in the notion of AXC's somewhat larger float which needs more force to get it moving.
Today' close above 1.25 is significant in that coming up from the test of the lows of 12/22 two plus months away from the supreme low of 10/8 (two months is the required measure) both represents a successful test of the lows and is confirmed by closing above the prior rally highs of 12/31 and 12/14. Now, by classic measure, we can safely say that there is confirmation that the trend has changed.
While there is minor resistance at 1.41-1.43 (see Aug 6, Aug 26 ), there is huge resistance in the range of 1.77 to 3.27. In fact as measured by my volume tool, "ITA Stock Blocks", between 11/7/97 and 7/20/98, 79% of the available float traded in the range of 1.77 to 3.27. Contrast this with 38% traded between 1.32 and .72 during the interval 9/1/98 and 1/6/99.
This is the second minor rally up from the lows. As I said before, in a sold out stock, the first rally is little noticed and hardly believed. The second minor rally is noticed by many more. On the third, it is too late. If there are no publicly exciting important announcements forthcoming, then based on TA alone, the current rally will run into a brick wall at about 1.75. Much of the year could be spent laboring up to 3.50. Again another reason for the preference of TA types for adequate base building.
On the other hand, if there is enough Ampex momentum in announcements and business deals, then this AXC price resistance will appear to melt away so much faster.
Ed Perry
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