Registered User
Joined: 12/20/2005
Posts: 35
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One thing which is very confusing is the stocks that make huge run ups and then drift down for many months on light volume. Sometimes even correcting more then %50 despite there being NO evidence of strong selling and sometimes even containing buying support(or so it seems).
Here are some quick examples off the top of my head:
CHNR - Massive breakout during 06 JAN lasting till Febuary. It then corrects %50 over light volume and with occaisonal big buy-ins(03/15/06).
ISON - Massive move-up during mid-04. and again a similar drift downwards... One large selling day but compare that to the volume on the move-up + the buy-ins during the correction.
I think I might be thinking about volume incorrectly because this cant be institutions 'still-holding' the stocks waiting for a true potential to be reached. I've looked at the bars and price action and still dont get it...
What exactly am I missing?
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Registered User
Joined: 12/19/2004
Posts: 457
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Both of your stocks had very little institutional ownership.
CHNR has a miniscule 0% of shares held by institutional investors, if Worden data is correct. ISON has only 5% shares held by institutions.
Institutions all have a tendency to think alike. Despite the fact that there is an area of wide lattitude for disagreement among institutional traders, over time they will reach similar conclusions. This is what causes trends to form.
These stocks with no institutional sponsorship will trade in a confusing manner. It might even be that these stocks were targets of a pump and dump scheme.
Trying to analyze these micro caps technically is not a worthwhile use of time, IMHO. I've learned my lesson, and focus on the active issues with instututional backing, and preferably have options traded on the stock.
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