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Mercer International Inc. Message Board

  • birdman_of_shemya birdman_of_shemya Apr 28, 2011 10:08 PM Flag

    Why all the Nervous Nellies

    volume folks volume

    I'm not sure why all the thoughts of a big sell off just because of the current weakness that is contray to the market and breaking through the 50 day. The stock had a big run up that blew past the market averages so this is no surprise. Most big runners will dip down to or through the 50 day on the lengthy run up. I also don't get the paranoia thinking there are signals suggesting a sell off. Volume has been huge on upticks and the downtrends have been very low volumes. If there was some secret bomb going to hit that people in the know are sitting on volume would show something fishy. This stock is actually showing strength in this pathetic low volume pullback. Could this thing go down big, sure, but nothing is indicating that somebody knows something. Also its not like the company has been on a ridiculous lengthy EPS upswing so I don't see this cyclical running out of steam this soon. I'm just a small fry and not the most sophisticated, but it seems like a bunch of people are not seeing the forest through the trees.

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    • peter_norths_proctologist peter_norths_proctologist Apr 28, 2011 11:00 PM Flag

      True, the low volume is one saving grace. But here's the deal. This stock is basicially a proxy for the price of NBSK. That's really what it boils down to. That's why people buy this stock in the first place. And with NBSK making new highs recently, this stock should at least be trading above the 50-dma, if not making new 52-week highs.

      Take gold for example. With the price of gold hitting new highs, the gold miners have seen their stocks trading at new 52-week highs, or at least trading above their 50-dma.

      For me, the fact that MERC continues to tank below it's 50-dma while NBSK price in Europe just hit a new high this week, is reason enough to be paranoid. It could be that the plumetting U.S. dollar will outpace and counteract the margin benefit of higher NBSK ptices, as we know MERC costs are denominated in Euro. It's not clear yet the full impact of an ever-weakening dollar. If NBSK continues to climb in step with Euro, maybe it will have minor impact. I'm not sure.

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