Forum Archive Index - February 2004

["Steven Moxham" <steve@stevemoxham.com>]

A few years ago I made a study of how sharemarket returns correspond to the way the market values a company. Part of that study included a phenomenon that I noticed with regards to stock charts. Whenever a small, lightly traded company (penny dreadful) such as CER experienced an abnormally large increase in volume, it often preceded a dramatic increase in share price several months down the track. This was especially so when the price and volume remained stagnant over an extended trading range. In mid December of last year CER experienced one such volume spike. Take a look at the chart and you will see that 3m shares changed hands on one day. Whether that has any significance to this weeks surge in share price remains to be seen, or indeed if it is indicative of an announcement to come.