It's All About WorkMany years ago I was told by a technical guy that the steepness of a stock's subsequent ascent was almost directly proportional to the amount of work being done during the consolidation phase. Say what?
I think he meant that if there was a whole lot of trading done in a narrow range, then the breakout would be accentuated by so-called exhausted sellers. I would be a spike rather than an upward slope.
In our case, we have had 5 trading sessions since the rumoured tax increase knocked the stuffing out of Tanzanian explorers. Nearly 5 million shares have changed hands in the $3.45 to $3.70 range. We tried to rebound after the plunge, but the nervous among us would have no part of it and knocked it back down. So here we sit 40% below the price on New Year's Eve, with optimists as scarce as the proverbial hen's teeth.
...and I don't have to tell you what happens when everyone feels gloomy. As for me, not that anybody could care less, I bought a few shares yesterday simply because I could not stand not being part of what I see as an overdue bounce before the Shareholders Meeting. As the blind optimist said "We shall see"