Posted On: 09/23/2013 3:22:52 PM
Post# of 2217
Longer term chart analysis
Unlike a lot of people, I don't use charts to predict breakouts with signals like moving average crossover or other such patterns. While I believe those indicators have some significance, the market as a whole is too widely manipulated for me to invest based solely on chart indicators.
I prefer to look at fundamentals, the history of the company, and then if I'm interested I look at charts to see how the stock is trading. The stock and the company do not necessarily move in tandem. GeckoSystems is a good example. They have made significant progress with their technology since 2009, but the stock price has been relentlessly pounded down.
There is only one word IMO that describes the trading in December of 2009 - Impossible. Impossible that is, without the addition of artificial
liquidity - otherwise known as naked shorting. Selling shares that were never issued by the company.
Here is a closeup of that trading:
Note that almost all of this stock was sold at between $.02 and .04 per share. I believe that the shorted volume doubled or tripled the number
of shares in retail accounts and the company did not sell any shares in this price range. The upper chart shows that in spite of four years of manipulation and price erosion the VWAP (volume weighted average price) for GOSY stock is still at around $.015 per share.
After challenging the .01 level (which I believe was capped with additional naked short selling - see the extreme moves in the A/D ratio) 2012 saw
a very aggressive attack on GOSY stock price with a great deal of volume at .002 and under. During this time the company publicly announced
that it would not be funding development of the technology by selling stock, but would be looking for licensing revenues. This was a strategic
business decision because when hedge funds and market makers sell an OTC stock they are relying on continued dilution to bring the price of
the stock down, allowing them to cover shares sold short earlier at higher prices.
I believe the company's refusal to participate in a downward spiral of dilution is the reason for the reversal we have witnessed recently and additional
licensing developments will drive the stock higher. As the stock price approaches the VWAP I believe diestressed shorts will be forced to cover.
Unlike a lot of people, I don't use charts to predict breakouts with signals like moving average crossover or other such patterns. While I believe those indicators have some significance, the market as a whole is too widely manipulated for me to invest based solely on chart indicators.
I prefer to look at fundamentals, the history of the company, and then if I'm interested I look at charts to see how the stock is trading. The stock and the company do not necessarily move in tandem. GeckoSystems is a good example. They have made significant progress with their technology since 2009, but the stock price has been relentlessly pounded down.
There is only one word IMO that describes the trading in December of 2009 - Impossible. Impossible that is, without the addition of artificial
liquidity - otherwise known as naked shorting. Selling shares that were never issued by the company.
Here is a closeup of that trading:
Note that almost all of this stock was sold at between $.02 and .04 per share. I believe that the shorted volume doubled or tripled the number
of shares in retail accounts and the company did not sell any shares in this price range. The upper chart shows that in spite of four years of manipulation and price erosion the VWAP (volume weighted average price) for GOSY stock is still at around $.015 per share.
After challenging the .01 level (which I believe was capped with additional naked short selling - see the extreme moves in the A/D ratio) 2012 saw
a very aggressive attack on GOSY stock price with a great deal of volume at .002 and under. During this time the company publicly announced
that it would not be funding development of the technology by selling stock, but would be looking for licensing revenues. This was a strategic
business decision because when hedge funds and market makers sell an OTC stock they are relying on continued dilution to bring the price of
the stock down, allowing them to cover shares sold short earlier at higher prices.
I believe the company's refusal to participate in a downward spiral of dilution is the reason for the reversal we have witnessed recently and additional
licensing developments will drive the stock higher. As the stock price approaches the VWAP I believe diestressed shorts will be forced to cover.
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