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KANA Software, Inc. (KANAE) Message Board

  • newlow2001 newlow2001 May 3, 2001 4:29 PM Flag

    Price up sharply on unusually high vol

    Volume is the fuel of the market, since stock prices only move up or down when shares are trading hands. Most stocks trade hands at an even pace for days or weeks at a stretch until special events occur. Those events might be rather ordinary, such as an announcement of earnings, a new product or new executive. Or they might be extraordinary, such as a merger or a new corporate alliance.

    Sometimes, however, trading volume spikes upward and the price moves higher for no apparent reason. Very often it ultimately turns out that the reason was major purchases of the stock by large institutions, hedge funds, mutual funds or private investors. The stealthy entry of strong players into a stock with enough buying power to boost volume by more than 200% and buoy the price is bullish for current investors. These major players are generally more knowledgeable and critical about their investments than individual investors -- and their entry at a particular price tends to set a floor for the future trading of a stock.

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    • "Sometimes, however, trading volume spikes upward and the price moves higher for no apparent reason. Very often it ultimately turns out that the reason was major purchases of the stock by large institutions, hedge funds, mutual funds or private investors. The stealthy entry of strong players into a stock with enough buying power to boost volume by more than 200% and buoy the price is bullish for current investors. These major players are generally more knowledgeable and critical about their investments than individual investors -- and their entry at a particular price tends to set a floor for the future trading of a stock."

      like PSIX run up just before they went bankrupt. Momentum players came in today and when they realize this isn't sustainable they'll leave. Institutions didn't buy into this today. They sold into it.