A funny thing happened today with Bayswater, the speculative Uranium stock I was telling you about the past week or so.
Today someone by the name of Dines recommended it and the share price and volume went (literally) through the roof.
Almost 10 million shares were traded (the most actively traded stock on the Venture Exchange) and the stock closed the day up 56%. In my opinion that is madness!
Perhaps I feel a little unlucky that I just sold my shares at $0.74 at my stop loss just a few days ago but you can't dwell on little mishaps like this.
There is nobody except insiders who could have predicted a move like this.
However, just keep in mind that for every buyer of the stock today, there was a seller. Is the seller stupid? Why would he sell now when the stock is going so much higher? Well the seller is selling usually because he thinks the stock can't go any higher or he thinks that he can buy his shares back later for a cheaper price.
It seems to me like it was the herd of sheep only buying shares today. Shares that the pros were eagerly selling and cashing in their huge gains.
Now don't think that I am all of a sudden turning totally bearish on Bayswater. On the longterm, perhaps this has the potential to be Dines' next Mega Uranium. If you look at Mega's chart and its volume specifically, I bet that Dines recommended Mega at the end of February 2005. The price gapped up about 50% just like BVE this time on enormous volume (just like BVE).
But how did MGA perform over the next 7 months? Very poorly! It slowly dropped down to lows of $1.10 (a loss of 33%). The stock during these 7 months seemed to be accumulated at these levels. However, after those flat 7 months, the share price rocketed to the sky all the way up to $11.25 (a return of ~600%).
If this is to happen to BVE again, then it would be smart to wait for the fizzle to leave the stock in a couple weeks or months and begin to accumulate the stock when the share price flat lines for a while.