By late morning, MNI had risen to over 90 cents a share, triggering a miniature sell-off. Was that sell-off caused by investors who believe 90 cents a share is MNI's ceiling??
From comments, we can't know for sure if investors think 90 cents is MNI's ceiling, because the volume was so low:
Impossible to say. The volume is still only 111,000 at 2:40 PM. It easily could have been a single person unloading a small short position (20k or so) that sent it up, or it could have been a novice day trader that speculated early on trying to pick up a couple thousand.
When volume is this low, small amounts make for large moves. Had this been a couple of months ago when I covered, it would have accounted for the entire daily volume over the past two days.
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4 comments:
Good heavens. Lunch time and not even 80k shares traded.
MNI is at 84 cents a share as of 1:20 EST... interesting -- volume increased when the price hit 90 cents a share -- was that sell-off caused by investors who believe 90 cents a share is MNI's ceiling??
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Impossible to say. The volume is still only 111,000 at 2:40 PM. It easily could have been a single person unloading a small short position (20k or so) that sent it up, or it could have been a novice day trader that speculated early on trying to pick up a couple thousand.
When volume is this low, small amounts make for large moves. Had this been a couple of months ago when I covered, it would have accounted for the entire daily volume over the past two days.
It looks like the increase of percentage points is more than the actual increase in price. From Friday’s close of .70, and today’s close of .83, the stock is up only 13 cents? I can’t see any investor actually caring about this sort of penny stock movement? I can see investors watching a whole industry for more signs of bankruptcy weaknesses.
After looking at the historical data I believe what you have here is the classical, "Pump and Dump" operation going on at open.
What happens is a boiler room group of traders will start a web site or chat room claiming to have the ticket to making huge profits on the markets. They will then sell subscriptions for day trading advice and each morning select picks for their subscribers (read as suckers)
What they don't tell them is that they bought a bunch of shares either the day before or that morning. They then tip their pigeons (would be daytraders)that there is a "hot rumor" and provide a link to some PR release (that they probably wrote) and say, "Buy, buy, buy! If you suck 5 or 10 people into the scam and have 5 or 10 people pumping it, it is not hard to start a miniature herd reaction driving the price up. When everyone reports in the chat that they are in, the would be tipsters sell the lot that they had previous to the buy recommendation.
If you will notice, the price this morning was up on a series of buys amounting to approximately 25,000 shares early. As soon as the price hit .90, the price dropped immediately at the hands of over 22k shares.
Pretty slick actually. Illegal but there are ways to skirt the law. Besides, the SEC has a really full plate right now, so they could care less about some greedy people thinking they are about to leave someone else holding the bag, when in reality, it is them that are the victim. Kind of sad and funny at the same time. Most day traders are very hard working individuals and this gives them a bad rep.
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