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Biotech / Medical : IMNR - Immune Response -- Ignore unavailable to you. Want to Upgrade?

To: kenneth kountz who wrote (1044)	9/4/1998 4:32:00 PM
From: John S. Baker	Respond to of 1510

"From Leedom's charts on IMNR, an "accumulation" in the stock has been going on for quite some time now, and I think the term "accumulation" means a good pattern in the stock, as opposed to "distribution". The question that is begged is obvious. If IMNR has been under "accumulation", then why has the stock tanked? " Fair enough question. Here is my answer, but it is not necessarily the answer. (First of all, some terminology. "Accumulation" is not measured by the stock price. Rather, it reflects the fact that there is some hidden buying pressure, usually from long-term investors who are buying the stock to hold for a long-term price increase.) People buy a stock for various reasons. Some buy it as day traders. Some buy it for a short-term runup, planning to sell as soon as they have made 10%. And some (investors, rather than traders) buy it for the long term. Volume from day traders pretty much nets out each day -- volume of buys equals volume of sells. But the effects of short term traders and long term investors don't always cancel out. Yet in a pure market, there is the immutable law of supply and demand which must always be instantaneously satisfied. This means that for every seller there must be a buyer, regardless of the price. So a short term trader decides that he is not going to get any more out of the stock within his time horizon ... and he decides to sell. Perhaps his decision to sell is triggered by the fact that the stock seems to be in a month-long decline ... or worse yet, because he just received a margin call. (Parenthetically, I suspect that there has been a good bit of margin-call forced selling in the broad market this past week or two.) But when he sells and for whatever reason, there is no predicting in advance which category of buyer will actually buy his shares. If however it is a long term investor, then we see that some shares have actually passed into long-term, accumulative hands even though the price was down for the week or the month. Multiply that by a number of such transactions, and it can explain how accumulation can occur even though the price is going down -- even though the usual case is that accumulation occurs while the price stays stable. (For an example of this, see FBAR at the Leedom site and notice how the accumulation line provides an early warning last spring of an impending price rise. Ignore the recent price fall off in FBAR, as it is anomalous.) Hope this helps some. JSb.