Am I right in thinking that we are seeing GREED and FEAR
in action today?
In the morning the price quickly climbed from the previous
close of 1-7/8 to a high of 2-3/8. The volume up to this point
was between 200,000 and 300,000. I don't have any cool tools, I
was just clicking away on the Datek real-time quote and this is
what I recollect. At the point where the high was reached, the
buying tapered off, and after awhile the price began to slide
back down, eventually to less than the opening price, pausing at
several points along the way, where a relatively large amount of
stock changed hands. As of lunchtime, the bid price is 1-11/16
and the volume 800,000+.
So my theory is that in the hour or two after the open, GREED
dominated, with potential sellers holding onto their stock,
waiting to see how high the price might go. Then, when the price
reversed, FEAR took over, namely fear of losing the accumulated
profit, and as the price slowly dropped, more and more people
took their profits, pushing the price still lower. I'm thinking
that the sellers taking these profits are those who accumulated
the stock when it was at 1 or less.
My questions to you:
(1) At what point would you expect people to start shorting the
stock and do you think that shorting has played any role in the
price action today?
(2) Do you think any momentum players have been involved, buying
during the price increase of the last couple of trading days,
who may now be jumping back out? |
