On your comments on SGI (The Daily, 4-1-02), you state it pulled back on higher volume to close with a doji. I thought we want to see the pull back on lighter volume? Is it the fact that it closed on a doji that the higher volume is good on this pull back? (April 2, 2002)
Yes, you are correct on the general idea that pullbacks on higher volume are usually not a good thing. The reason SGI was more appealing Monday night is that it pulled back on low, below average volume the prior week, but the past two sessions it is trying to find support at the 18 day MVA and where it formed a flat consolidation in early March. The volume ramping up as it sells lower and rallied back up Thursday and today's tight doji (very tight intraday range) indicate buyers are supporting the stock at this level. Even though there is higher volume and the stock is going nowhere, it is holding support; there are as many buyers at this level than sellers- - the buyers have finally caught up with the sellers after the selling and are stepping in and accumulating shares. Think of it as kind of running in place in mud, and starting to get your feet under you with some traction.
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