StockFetcher Forums · General Discussion · QUESTION FOR THE SF BOARD.<< >>Post Follow-up
658 posts
msg #92588
Ignore mesayah
5/13/2010 12:53:22 PM

If there is too much public interest in a stock too fast, as opposed to gradual interest,
will there be less of an overall increase in that stock?

Cambell. Can you field this one?

469 posts
msg #92626
Ignore straken
5/13/2010 10:07:34 PM

That would depend on what the bias to public interest is...
If it is growth or news related, investors will run into an equity too fast creating an extreme overbought condition, short interest will cover and the stock rapidly advances pushing its price well above its fair value or book price. Then the slight correction that arises from overbought conditions as well become extreme selloffs creating a short term measure of extreme volatility.
After which the fear of this volitile movement must pass thru a period of volitility adjustment as fear subsides and gradual moneyflow increases into the equity again.
This is not indicative of every stock on the market but I'm sure you've had enough experience with volitile movements to realize when the fear of selloff appears imminent a stock cannot form the base needed for breakout of its VWAP or sustain a rally such is the reason penny stocks move so volitile. Without reports of earnings or financial filings no real market value can be placed on these companys, so news or pumps can move the stock 300% only to selloff rapidly for long periods before the next news or relative innuendo because no real fair value can be placed.

658 posts
msg #92627
Ignore mesayah
5/13/2010 10:24:48 PM

Good reply. Thanx.

113 posts
msg #92632
Ignore guymar
5/14/2010 3:24:11 AM

I would say that this type of situation is typical of an Elliott wave 1. The price increase of this wave can be used to forecast all retracements and extensions by using a Gann Box for example. It facilitates all subsequent buying in wave 3 and 5 ....

StockFetcher Forums · General Discussion · QUESTION FOR THE SF BOARD.<< >>Post Follow-up

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