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Friday, April 27, 2007

ROCM


This is a good illustration of one of the dangers of low float stocks. It dropped today on no news. Earnings is coming on Monday, and I think a lot of people have been buying in anticipation. I took a look at a one minute chart to see if it gave any clues. Although I don't know for sure, it could have been manipulation by short sellers (or a hedge fund) to trigger stops and scare holders into selling so they could pick up cheap shares. I posted the times and the amounts of the drops on the chart. It did not drop all at once, there were 3 time intervals where the drops took place. Is this a good buy here? Maybe, but I wouldn't touch it until after earnings are out. There is also a possiblity that bad news leaked out (illegal but it happens).

2 comments:

ztech said...

Thanks for sharing, David.

TSL and now ROCM, two examples of theStreet/Cramer and IBD at odds, could be my imagination too.

I tend to believe it was shorter manipulation.

But also agree with on that it may be bad news leakage...

Would like to hear comments on BW too...

David said...

Thanks for the comment. I am posting on BW in a separate post.

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