i can't recall any specific cases (and don't feel like looking them up now) but i know there have been multiple allegations of this exact scenario you discussed. a related one is bby now traded well below the takeout price which is def helping the former founder in his takeover bid.
MCP, value play or value trap
- Thread starter Chuck E. Cheese
- Start date
Yesterday we had huge volume exhaustion followed by a hammer today: not too bad odds IF price shows some strength above today's high of 7.33 that it will work its way up to $8-9.50, IMO. (I might place a buy stop limit order, stop 7.34, limit 7.38)
We also have divergence forming on the MACD which gives even better odds for a follow through to the upside, that is, IF the price starts moving up.
I do indeed think a short-term bottom is in, but whether it is a long-term bottom will need more evidence later.
(I will be reposting this in a new thread entitled: "Is this stock good to buy now?"--not trying to steal any of the OP's thunder. I actually found the hammer (I love hammers) on a stock screener, was going to post about it, and then saw this thread too.)
(PS see my recent thread: "Is this stock good to short now?")
We also have divergence forming on the MACD which gives even better odds for a follow through to the upside, that is, IF the price starts moving up.
I do indeed think a short-term bottom is in, but whether it is a long-term bottom will need more evidence later.
(I will be reposting this in a new thread entitled: "Is this stock good to buy now?"--not trying to steal any of the OP's thunder. I actually found the hammer (I love hammers) on a stock screener, was going to post about it, and then saw this thread too.)
(PS see my recent thread: "Is this stock good to short now?")
the only way to pick bottoms like that (if you can call it that) is to go down to a lower time frame like the 30 or 15 minute or at a minimum if you're trying to pick a bottom say "go long if price above yesterday high" - but even then you get faked out like on 11/9 price went above the 11/8 bar but kept falling.
yes you will miss massive short covering rallies off the bottom but you'll also miss continued plunges into the depths of despair.
If your unit were dimes instead of dollars, then I might have agreed with you. Good luck to you!