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Gold/Mining/Energy : T.ITE: iTech Capital (TSE)
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To: knight who wrote (103)2/28/1999 3:16:00 PM
From: keith massey  Read Replies (1) of 5053
 
Your not the only one that saw the selling. Here is my reasoning for the sell-off in the .60's.

1. Momentum traders that got in on the high volume run-up to .72 are now making an exit. Most momentum traders don't even know the fundamentals of a company when they buy (or only know the basics). When a stock breaks to a new high on high volume they jump on board. They set their stops right away and don't hold for more than a couple of weeks. If I was a momentum trader (which I often am) I would also be making an exit right now.

2. $.65 is a large resistant point set back in Feb. March and April of this year. Any time you have support for a stock at a given price and it breaks through that support to the downside, the support level becomes a resistants level. People that bought back in Feb. March and April at .60-.70 are now seeing a chance to break even. At the end of Aug. these investors saw a 50% paper loss when the stock hit .31. Many of those people are happy just to get their money back and move on.

3. Since the news of a new business deal is not going to be out for at least a couple of weeks the well informed shorts knew that they can drive the price down for .65-.70 for a flip before any news was released. I don't know what the current short report is but I doubt that short sales have made up very much of the recent drop. It takes a lot of guts to short a stock that could be in for a very big run-up if the news is right.

Best Regards
KEITH
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