THE WAY NANO TRADESA common mistake that people make in the market is thinking that all stocks follow the same "rules" of trading. To a certain degree, yes, this is true. Market cap, revenue and multiples do, for the most part, guide the stock with the "usual" fluctuations around that norm.
But Nano, at present, is pre-revenue. And with that, the same rules and measures just don't apply...at all. As such, you have to be prepared for far FAR bigger swings in the share price, driven mostly by newsworthy developments and the capturing of the imagination for the prospect and potential for those future revenues to finally come true.
This is why we see bigger swings in Nano. From what I can see, the stock is held reasonably tight. So any positive news has the capacity to move the stock up strongly. At the same time though, any quiet period also has the potential of seeing the stock drift down, as we have for the past couple of weeks. People misinterpret this selling, and end up selling too. Making matters worse, that selling take place in otherwise low volume, only furthering the downside potential. But it's in that volume, or more accurately LACK of volume, that you know the company is fine. The drifts can be annoying, but they are nothing to be concerned of. It's just the nature of the stock at this point.
So play the drift? Meh. I've tried doing that, but probably lost more times than won. The problem is that that substantial news does arrive, and if you're on the outside, you end up chasing the stock which is never fun or profitable. Generally now, I'll hold my position, maybe curse a little (yes, this tries my patience), and buy more at a cheap price, as I did today. This has proven to be a better strategy time and time again for me.
But for this to be a win though, you do have to buy the stock closely to there at least being a regular and/or strong string of newsworthy events. Are we there with Nano? Yes, I'm sure of that. So buying these lulls shouldn't mean waiting too much longer at all.
Some might thing that waiting until the company is fully proven and profitable is the time to buy. I do understand that thinking, and yes, I suppose it's safer. But the great gains by that point have already been made. So at this point, it's a measure of risk vs potential reward. And this is where Nano absolutely intrigues me. Personally, I think the risk at this point is minimal and reducing steadily. On the other hand, the potential reward is simply stunning. It's this risk/reward equation that has me most excited about the company. Add in the potential now for those strong newsworthy events, and you have the makings of a stock that can have an absolutely explosive upside.
Everyone decides how to best play a stock. But if you're in Nano, just know the stage the company is at, at this moment, and how it trades accordingly. In my thinking, just a little more patience is all that is needed. In the market I am NOT a patient person, at all. In this case though, the potential reward in the short term provides all the reason I need to just sit back and enjoy.