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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Scott Pedigo who wrote (4421)	1/11/1999 8:32:00 PM
From: Ed Perry	Read Replies (2) \| Respond to of 17679

<<< Your questions >>> Since AXC is both low priced and under $5/sh, it is not generally marginable and not subject to easy public shorting. Also, while momentum, day traders, or otherwise short term traders could try this one, I doubt it; just given the risk of putting capital up and the transaction costs involved, there are so many better shorter term opportunities elsewhere. Therefore, I think that these influences are currently minor in nature. What was apparent in today's price and volume was the intensity of trading from about 10:15 (when the ascent began to falter) on to about 12 noon. This to me meant that most of the sellers were longer term holders who had bought between 2 and 3 in early 1998. Finally they had a chance to get out. However, once this selling pressure abated, prices drifted higher on relatively less intense volume for the remainder of the afternoon. In the days's context, clearly a bullish sign. Returning to my volume tool, where I had observed: ... 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. If now, I include the range between 7/20/98 (1.80) and 1/11/99 (2.06) then, in this saucer like pattern (very valid bottom formation for a low priced stock) some 54% of the available float has traded in the range. What I am concluding is that while prior resistance is acting like it should, however, the force of the rally in coming off the Dec. 98 lows is throwing off huge volume and easily absorbing whatever sellers there are. That is, unless there is disappointing Ampex news, or a severe overall market break, then this broad resistance at these price levels should fall away in a matter of days and weeks. Again the notion of the "hurry up" time frame which seems to be prevailing (see my post #4398). I would not be surprised if there were no Ampex announcements forthcoming for some number of weeks. Using either chart analysis or ratio analysis, from a longer term point of view they both refer to the same observations (regression to the mean), AXC the stock may be simply correcting from a severely oversold condition. Proof of this would be a leveling out and a consolidation but at what price level I do not know. Ed Perry PS: why the low of 1 5/8 ? IMO, the "logical" stop loss point would be 1/4 point below the major resistance bottom of 1 3/4. From the perspective of a long holder from above 1 3/4, below the stop loss point of 1 5/8 would risk returning to the ones. However, there must have been enough sell orders congregated there to warrant the locals to take prices to that point then "and mop them up". <g>