RE: Just about ready to...Stem4me"Isn't it a negative sign if the 50-day moving average falls below the 200?"
Yeah, presumably those averages crossed on the way up too, and fat lot of good it did anyone. This cross on the way down is probably just as meaningful.
I suppose it could be interpreted as a negative sign everytime the share price declines at all...and a positive sign every time it rises. But how much weight you give to such events is a subjective evaluation. By that I mean it's largely coloured by your own biases and perceptions. Each of us has quite a few of those.
All you can do is try to remain as objective as possible, while at the same time reminding yourself at regular intervals that you (and I and everyone else) don't have all the information.
We see averages cross many times for many stocks. Doesn't mean that much. In fact, Bombardier, like many issues generally tends to drift aimlessly, with a slight downward tilt, until something happens. Then, depending on who is looking at buying and selling, and what weight they give the news (usually more recent news is given too much weight), the share price moves up or down.
Much of the time it has little or nothing to do with the company's longer term prospects, and this recent move appears to be more in line with overall market sentiment than anything else. It's just that a sufficiently large number of institutional investors have decided to buy or sell. Individual investors make up less than 20% of the share float and usually don't move all at once, so they (we) have little influence.
A mutual fund manager, or pension fund manager can decide to sell for a wide range of reasons. Maybe he/she has found something else he/she likes better. Maybe he/she has just sold something else and is now coming to the conclusion that BBD looks ready for a significant move.
Hiis, or her decision, or the decisions of a number of instutional investors often does not coincide with the reality of things. Decisions to buy or sell can have more to do with their individual situations....what criteria is used to select stocks. You can see this in the fact that things move one way one day, or for a few days, and then move the other. If these guys really knew what they were doing (anymore than you or I do) we might expect the direction change less frequently.
Still, there's no shortage of investors who assume that the new price more closely represents intrinsic value than the old price. Often that's simply not the case. It's more a situation where the crowd lurches in one direction for awhile, and then lurches in the other. And what motivates that ebb and flow amounts to little more than emotional overreaction.
Over the long haul all the short term lurching about is meaningless. Bombardier is worth what it is worth. That's why it is said that the stock market in the short term is a voting machine, but in the long term it is a weighing machine.