RE: Interesting day - Crossing the RubiconRozelli, the market is a living creature with many moving parts of players and methods. Institutional investors have many advantages over the average retail investor. It is a full time job for them and they have extensive resources in support staff and systems. More important, they have money and cash flow. In a thinly traded stock like Oncolytics, they can have a significant influence on the stock price. They can be the dominant buying group and bench marks like P/E ratios do not exist.
It is “the market’s” choice to allow the correction rally to continue. Oncolytics market cap valuation is sitting around $300 million as of yesterday’s close. It is ridiculously low for a company in its pivotal trial for Reolysin. The minimum market cap that has any credible support for it is above $500 million. The stock price has to correct to above $7.00.
There is resistance by “the market” to the stock price moving above $5.00. $5.00 is the second level trigger point for retail investors in Canada. Margin levels will increase by 25% of the retail investors’ holdings if the market price moves and holds above $5.00. We are trying to ford the Rubicon on the march to $7.00.
The next few days will tell how “the market” wants to play. Spike the stock? Stall the stock? Support the rally? My vote is on supporting the rally.