No reason to close short position. Longs haven't capitulated. The clue of capitulation will be huge volume. I see no evidence of capitulation on the volume side or the fear side of the equation. Stay short, watch for capitulation, back up the truck on the buy side when the flush out comes.
Open your eyes and see. The money is dead! The money is dead! Tons of articles pumping and still it goes limp. Even management talking a good game can't get it up. This isn't an opportunity; it's a value trap.
I hope you aren't surprised by the action. You were warned to sell. Next support is $25.00. If you short here, you should profit well. Moreover, long before the credit crisis was on the radar screen this stock acted like a great short candidate. When the economy was strong, it moved sluggishly. As oil prices moved up, it limped along. But look at the speed of the move downward;impusive and decisive. Those are the characteristics of a great short candidate. Tax loss selling could push this Dog below $25.00. Don't be bold. Sell it and take the loss.
The time to back up the truck is now. I thought the stock was undervalued at $70.00, but to buy it at $2.00 is a gift. I am so excited over this once in a lifetime opportunity to buy a company of this stature. Sell the wife, the dog, the house. Buy AIG!
I hope some of you sold after I posted this message. It seems that the stock gets worse over time. I continue to stand behind the predictions of the post. Swapping out of this stock into a better run company would be a smart move. We all make mistakes from time to time, but learning from mistakes is hard for most people. Buying a share holder unfriendly stock is a disaster waiting to happen. Good luck to all.
Taking a short position right about here would be a smart move. My analysis tells me that a move back to $34 is coming. This stock's roundtrip moves have become highly predictable with successful trades recorded. Buy back programs, in many cases, are gimmicks. I don't think a buy back will work in the case of this stock because there is no real demand for the shares. The same people are trading this daily. When it reaches the upper end of its limited range, they dump it. If you time it right, you can get rich. I have to admit. If I was a long term holder of this stock, I'd be ready to blow a gasket over RDC's uninspiring management team.
Enron went to zero in a similar pattern. People who know something are getting out. The little guy will be smoked in the final analysis. The loss of capital on this stock is permanent. Cut your losses. Get out. There are better opportunities elsewhere.