There are three share price trends present in every stock in the universe at every trading moment.Which one are you talking about?
Technical support/resistance points relate to all of them.
Cramer even though he has amazing memory every stock under $10 is speculative in nature disregarding fundamentals.
Knowing why is not healthy for your brain even if Mr.Market revealed it to you by whispering in to your ear but if you are bent out of shape for not knowing i do not want to see your disfigured permanently so here is most logical take: VG being part of particular index has to follow the same trend unless there is active buying taking place and who in the right mind would buy relatively strong stock on day like today.Going against the current is rear occurrence.
Just like the idea/knowledge/ that VG is and has been undervalued is truly ridiculous concept.Let me explain using different angle:
George Soros has spend decades doing research on relationship between historically established P/E and share price of many stocks.What he discovered is something Mr.Dgroves and his followers will not accept and that is that share price trend of a stock very seldom crosses P/E trend point to be considered neutral or fair.Most often share price continues its trend on it's way up or down without interruption.
This principle applies to broad market as well and that is why we are in second stage of so called P/E expansion area which combining with earnings growth creates above historical stock market gains.
Do yourself favor and accept it unconditionally that overwhelming majority of times you can't know why market does what it does on day to day basis. Unless you want to be like almost all talking heads trying to convince others that their interpretations are closest to the TRUTH.
Bottom line is this: all you need to know is Mr.Market's long term INTENT.Details how this comes to pass is irrelevant .Every day trader is now happier to have easier opportunity to make or lose money due to increased volatility but for buy/holder short term volatility doesn't matter as long as it doesn't make you nervous and forces you to dump your shares.
Sometimes selling in order to break even is almost as tough as taking profit.
If you are looking to see real break out you need to go back to end of summer 2009 and analyze spectacular price/ volume explosion. This was my primary reason to accumulate VG.
I believe comparison of VG and EGHT is valid as long as EGHT is around.As i indicated before positive destination for EGHT is to be bought out or negative is to go bankrupt based on statistical data.
During first stage of this broad bull market run which was created by indiscriminate technical buying spree both stocks performed very similarly going from $.3 to $5.4. The second intermediate pps run cycle for EGHT from $3 to $12 was based on fundamentals which give us somewhat probable top for VG of between $12 and $17 since Vonage has relatively more solid residential and better business part of fundamentals.
There is an exception to every rule and although i would like to see at least double daily volume on day like today as long as pps is up i have no reason to complain.But as far as i know myself I'm not complainer no matter what Mr.Market does.
Some experienced trader once said "share price is king and volume is queen".Based on his formula combined with Willian O Neil's possible cup and handle formation /not confirmed yet/ i suspect likely top of this intermediate trend between $12 and $17 in next couple of years.
Confirmed cup and handle brings much higher probability of 100% or more pps appreciation .
According to W.J.O'Neil formula you need to have at least double average daily trading volume on breakout day.
So far i see March 6 as first failed breakout.
There is no need to admit you were wrong because nobody in the world is right more than 50 maybe 60 % of the time.There is huge difference between operating in the world of probabilities and in the world of certainties though.
My philosophy is to learn as much as i can about market's intent and logic which is whole lot more difficult than to figure out what you think.
When i noticed VG breaking through lower range of intermediate channel level my focus was directed at book price.However for every share i sold i bough March 4 calls.
No clown who operates in the world of certainties can understand this strategy.
As anticipated selective answering and never ending permabullism continues so let me present your state of mind on May 26 2011soon after VG started the most severe correction in this secular bull run.
"$23.00 is mid range! The lowest PPS is $6! Highest is $43
New products are expected, they continue to squeeze the balance sheet to gain better earnings, and the Industry is hot.
There is huge upside here, and not much downside. The new management has done a great job! "
I'm really puzzled why you keep doing it to yourself and others instead attempting to learn from the past-the only undeniable truth within stock market environment.
What happened to VG in April 2011 was indiscriminate buying frenzy created by broad market which had nothing to do with FUNDAMENTALS.
So we have time line on continuation of low risk environment for shorts and manipulators until March 30 due to fact of unlikely release of any significant news fundamental nature before end of this month.
Statistical evidence is what i meant.You may be able to make money with VG or any other stock but if you develop "market addiction" your success of outperforming the market in long run/10-20 year period/ is less than 5%.
On the other hand if you set price target to get out of VG at considerably higher level above your average entry
price then your chances of outperforming market are much higher.But there are two important assumptions here: VG continues to go up and after selling all of your shares you never speculate in individual stocks again.
For you to be be able to "beat" the market VG would have to be sold pretty close to IPO level.
On the other hand i'm becoming more and more convinced that broad market correction is going to take place between S@P 2000 and DOW 20 000 so selling half VG due to fairly long lasting relative share price strength makes sense but there is another possibility for general market. Increased volatility for 6-12 months with indexes staying within relatively close distance to ceiling resistance levels/5-10%downside/.
You see long term market run is not over yet but investor fear level factor has to be increased in order to provide "better quality" road to travel on for second stage of the market run.
If this is the direction market decides to move in short term than sector rotation should provide the fuel and VG is already leader in the group.
Good luck trading VG or any other stock but it is important to remember that tax implications are not friendly to small traders. Statistically speaking on average you have to make 70 grand/year to brake even.So to improve your adds is helpful to have hundreds of thousands if not millions at your disposal to start with.Second- requirement is solid basic fundamental and extensive technical knowledge.Third- lack of emotional attachment.
I believe on this mb only Mr.Ducati is qualified to be successful long term trader.
I have to admit relatively undervalued based on competition comparison sounds better than undervalued in absolute terms. Not sure folks who bought VG based on this principle understand the difference,though. Buying or selling without "consultation" with technical picture is called dollar cost averaging or gambling .
There is no third option.
I almost hesitate to ask but since you seem to enjoy digging out old posts would you mind to show your messages from April 2011?
I personally would never call you crazy because i subscribe to similar principle.100% of my Roth Ira is in one stock. Diversification is good for general public and chicken.As long as you unconditionally accept and understand risk factor there is nothing to worry about.Of course it goes without saying that on top you have to have right relationship with reality/market/.
Today was perfect example why you do not need to know because as you can see stock market is built on contradictions.
I can almost hear you say:somebody knows something.
"I've got enough "internal peace""
That maybe what you think but not necessary how you act. Most wounded investors turned speculators want to get out at the break even point in order to close painful chapter but unless you get out and totally forget about stock market there is no place to hide.You may have been inflicted by the most dangerous virus called market bug and the only way out is either loose everything or adapt and survive.The adds are not encouraging.