My Appraisal of Recent Trading ActivityPericles and frequent readers, there has been a dramatic reduction in the number posts since I said that I was leaving the Board. Given my taste for conspiracy theories, I could interpret the exchange of posts between TMM9 and Megaflop as a coded message to stop posting. It was a rare and strange exchange, particularly for Megaflop earning 4 of 4 ratings at 5.
My appraisal of the trading this week and last Friday is that there remains a group who want to play by the old rules. They probably do not read this Board. They continue to sell big lots to depress the stock price. My advice to the group reading the Board who support the correction rally is to take advantage of the situation. Respond by buying the blocks and increase your holdings. The flaw in the seller’s depression strategy is every sale drains their holdings.
There could be technical reasons that explain why supporters are not buying. Funds have prudent man investment rules to promote discipline. For example, there may be a maximum holding in any one company of “10%.” A prudent man has to consider the cost of an exit strategy if the investment falls short of expectations. Given the length of time people have been accumulating their position, there may be limited room to buy more.
Another prudent man rule is that an investment in any company can not dominate the fund. A limit on the market value of the holding in any one company is set at “5%” of the total fund. This rule forces a manager to sell when times are good. With the current market, Oncolytics is exception. It may be the only holding pushing this button. If the rally was economic based and wide spread, the growth in the total fund mitigates this rule. Compounding the situation, the net cash flow for institutional investors to invest is not robust. Withdrawals are offsetting new cash flow. I can see this rule forcing supporters of the correction rally to sell.
My appraisal of Monday’s trading activity is that it was a good day for the ONTY, and not a good day for its lookalike ONCY. ONTY was hit hard last Friday with the announcement of a stock issue, down 90 cents. Monday, ONTY rallied. ONTY closed up 13 cents at $3.43 on a volume 457,947, over 4 times the daily average. You could credit the gain on the announcement that on Sept 27 ONTY will be presenting at the JMP Securities Conference.
ONC closed down 12 cents at $4.37 on heavy trading. Oncolytics also announced that it was presenting at the JMP Securities Conference. There was a heavy sell off when the market opened to establish the low of $4.31. There were small trades during the day to recover the loss and post modest gains. As the close approached, trading picked up with larger trades, and ONC lost ground. It appears to me that the “market” is prepared to let the stock price drop despite an unrealistic market cap valuation. Supporters of the correction rally had the opportunity to make the sellers pay by buying. The supporters were silent.
I credit today’s rally to the patent press release and the JMP Conference presentation. The patent release was different because it put a date of 2028 on its value. The Conference format was different from other Investor Conferences where Oncolytics has presented. Brad’s presentation was cut short to allow the moderator to ask questions and open questions to the floor. It was a dynamite format and explains why Oncolytics is up 60 cents. I would not be surprised if Oncolytics reached new 52 week highs today. Today’s volume has to include new institutional and retail investors jumping onto bandwagon.
By the way, ONTY is trading down 6 cents at $3.37 with a volume of 163,586 when I checked about 15 minutes ago.