Just my opinion-
The price of MELA was artificially inflated to maintain value in the 11,000+ $3 April Calls that were purchased a few weeks ago. This unusual activity was what fueled the price increase in the first place, as speculation of an insider buying these large amount of Calls fueled buying.
My theory is that the price of MELA over the past week has been manipulated to keep those calls in the money, and to prevent them from becoming worthless. When these calls are realized, this represents 1.1 MILLION shares of MELA. This week, those shares are going to be sold, quickly dropping the price of MELA back to $3 or below.
Again, its Just my opinion, but I'm not a fan of MELA to begin with, lol
Not sure I agree with what you said, but now that the week is done... I was wondering what your re-evaluation was...
looking at the trend over the last month, this looks more likely to continue an upward path...
I called in 130 July calls at $2 last week and will trade near the money short term options on them on strength and take them back on small moves down. I'll hang on to around 5000 shares as a base incase this jumps
It BARELY held $3.40 today, but I expect the trend to continue downward over the next week. Target close for this week is $3.15
Want more evidence? Just look at the charts.
On March 29th MELA closed at $3.17
On March 30th, news of the massive call buying fueled speculation of impending news:
MELA closed that day (March 30th) at $3.74
For the next 2 weeks, MELA stayed glued to $3.50 until it broke out Friday afternoon, coincidentally near to the close of market and OPEX (options expiration).
The "smart" money feels the same way- with the share price at $3.66 you would think that May $3.50 PUTS would be relatively cheap. They are not- currently around $.50. This means that if you were planning on holding them through expirations the price of MELA would have to be BELOW $3 to break even. ($3.50 Put - $.50 cost = $3)
Why am I posting this tonight? Its good to have a timestamp on this so once MELA starts to bleed off tomorrow, I can point back to this post and them promote my site. :)
<<Why am I posting this tonight? Its good to have a timestamp on this so once MELA starts to bleed off tomorrow, I can point back to this post and them promote my site. :>>
I don't believe that I will be taking his advice.
MELA Sciences, Inc. (NASDAQ:MELA) is today's 8th best focus stock. Its daily price change was 5.8% in the previous trading day. Its upside potential is 201% based on brokerage analysts' average target price of $11 on the stock. It is rated positively by 100% of the 3 analyst(s) covering it. Its long-term annual earnings growth is 40% based on analysts' average estimate.
and there it went!!! yep that is always the case with this dogcrap. i told you the market makers just play with this pos cause it is so easy. look at that spike down to $3.24.....sooooo easy for them. then they buy all those shares down there cause in a couple of days they will buy it all the way up to make suckers get back in then they sell like whores and run it back down. rinse and repeat. criminals. make those azzholes pay a commision on their pos 100 share orders and that stuff will stop.
Your speculation seems to rest on the premise that "massive call buying fueled speculation of impending news"
What do you think sparked the "massive call buying"?
I don't see any evidence that the rally was driven by "speculation of impending news". Where did you see ANYONE mention impending news? If anything, the news seemed to be pointing towards an additional 180 day delay. It seems more likely to me that the massive call buying was driven by shorts hedging their positions in the face of a rally, not the rally being driven by the call buying.
I wouldn't be at all surprised to see this trade back down below $3 but I think your analysis is based on faulty assumptions or at least far more certainty than those assumtions warrant,
Sounds plausible to me however, with the possibility of a decision coming through at any time, I believe the longer this thing plays out, the more nervous shorts are becoming. The upside potential is much higher here than the downside. Those April calls could have been some big short covering his tracks.