Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : CMOZ, next cmgi -- Ignore unavailable to you. Want to Upgrade?

To: gunslinger who wrote (409)	2/7/1999 9:36:00 AM
From: TOPCAT1	Read Replies (2) \| Respond to of 947

CMOZ... more analysis and thoughts for the next week.... Here is what I understand the Market Makers do and how this relates to the trading pattern of CMOZ on Friday... the job of the MM is to make stock available for sale... in the morning, there was pent up "real" buying so up went the price, the MM had to sell stock and if they don't have it they short sell stock... this presented a problem for them later in the day because they have to remain flat by days end (the internet game has been very hard on shorters and they have learned their lesson not to be short, for example, if CMOZ kicks out a significant press release and the market likes it, it would be impossible for the MMs to control the action because of the very thin float on this play)... so they quickly removed the bid and shook out some sellers but not that many... the reason they can do this is that they prey on nervous investors... nervous investors watch the stock price continuously and have mental stop losses, for example, if CMOZ goes bid $2.50, they instantly sell... and that was what happened on Friday but instead of really shaking the tree and driving the price near $2.00, "real" buying spoiled the MMs plan... did they cover their entire short position, I don't know but clearly during the last 10 minutes of trading, strong "real" buying cleared the offers and forced the price back up... according to one MM I talked with, he said there was no "real" stock for sale at the end of the day... why... in the last five days the price has formed a "psycho" bottom, by that I mean all of the penny players have left and have been replaced by a more serious type of investor (essentially the stock has pulled back, consolidated and now has a new look), this new look is very appealing to the experienced broker, MM and investor (it means lower risk than before during the volatile stage)... because the price has held in this range, this is an indication that something more is happening in the company otherwise the price would be at $0.50... this results in everytime the price pulls back a bit, everyone starts to buy more, not sell (they continuously build positions rather than sell positions)... the net result is strong buying support and less selling as seen on Friday.... one other reason why there were shares for sale on Friday is that there are only about 11 million free trading shares (about 33 million are held in escrow at the transfer agent, they can't be sold, shorted against - nothing, I think until at least September before any hit the market)... so looking at the chart, closing prices shares Jan 18-22 $0.31 to $0.41 8,665,300 Jan 25-29 $0.91 to $3.44 27,257,500 Feb 1-5 $1.81 to $2.43 9,183,600 Of significance here is that there was a massive consolidation one week ago without the price collapsing... further significance is the last two days of this week saw 1,448,400 and 1,118,900 shares trading in a very narrow range and closing strongly at the same price of $2.43... clearly the float has consolidated and changed hands, lower volumes are an indication that the new share holders are secure at this price level.... also, the Market Makers are a very smart group of people, they play against and in front of the retail trade... when there is retail trade, they know something is still coming, so they play a close short game and move the price according to the demand... bottom line is that there must be more happening in the company or the price would have collapsed by now....