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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Herb Blair who wrote (4632)	11/1/1998 10:09:00 AM
From: lws	Read Replies (3) \| Respond to of 27311

Hi, Herbert, I can only speculate in answer your question, but I can extend it with a complementary question which must also be asked. The three days (Friday, Monday, and Tuesday) together produced a total share volume of almost 2.5 million shares (or half that if it is the case that double-counting should be backed out). The Friday activity was about 443k shares, and closed the price at $5.25. This set the stage for Monday. Monday's million share volume with the price jump can be attributed to many things: the perception that Friday's move foretold a breakout, the possibility of buying on margin, short covering, (rumors of) analysts' visits to NI, buying by insiders and/or other knowledgeable people, (volume) momentum players, and so forth. There's no way we can know how much each factor contributed to the buying, but I think it's safe to conclude they all played a role in Monday's action. The problem is Tuesday. That was another million share day, but after spiking to $6.63 (from Monday's close of $5.88), the price closed at its day's low of $5.75, only $.50 above Friday's close. Almost all the gains of the prior day were given back in nearly identical volume. Where, or who, did all this selling pressure come from? I can imagine that a lot of quick profit-taking was involved since the price rose from just $4.375 the prior Friday (Oct. 16). But still, I can't believe that all this Tuesday action was traders taking profits. There must have been some large positions being liquidated to produce a million-share day. Of course that worries me. So my own question along your lines: Any speculation on what was behind this rather incredible 2 days of action? Why such strong buy action the first day and sell action the second? I'd sleep a little better if I knew what was behind the 2nd day. Regards, lws