What am I missing on DIVX?

Discussion in 'Stocks' started by eagle488, Nov 28, 2006.

  1. Ive tracked and traded this stock for a month now. All of a sudden, on no particular news, it starts trading down 3-5 dollars. Then there is no volume. Out of nowhere, there comes all this volume like today and wham, up 4 bucks. No news or reason for the sudden increase in volume or 4 buck pop.

    When the conference call came out some weeks back, it was a great call. Then the stock plummeted down to 22-23 dollars. Analysts upgraded it as a strong buy and set a nice price target. Still didnt budge.

    Then out of nowhere some days later the volume turns up like crazy.

    What is going on with this stock? The only way I can figure out when it goes up is simply by looking at the volume. When the volume bars start jumping go long, when the the volume starts to drop sell or short. It doesnt make any sense on any chart.

    Someone is manipulating this thing. I am betting that we will see this lower next week. It doesnt seem to trade based upon any real news or fundamentals.
  2. Kramer told everyone to sell at $26 so naturally now it's caught a strong bid. I wish I could say I bought some but I didn't. S&P likes the co I read a strong piece but by now I've forgotten it all. awesome looking chart.
  3. Cramer might be one excuse, but the stock was trading flat today at 28 with no volume. Suddenly, at 2pm, its like someone turned on the tap and it moved up 4-5 bucks.

    No news out. It was way after Bernanke spoke. Over an hour and a half.

    Did everyone suddenly wake up and want some DIVX?
  4. piezoe


    Someone is manipulating this thing. I am betting that we will see this lower next week. It doesnt seem to trade based upon any real news or fundamentals.

    Indeed, that is the way the market works. Stocks with the largest floats naturally require the deepest pockets to manipulate and thinly traded ones the least amount of cash. This is all perfectly legal and standard practice. In fact it's the common means by which large share holders liquidate their holdings without taking too much of a beating on price.

    In a thinly traded stock it may take only a few thousand shares bought over a week or two to move the price up and attract buyers. Typically, you start by both buying and selling in large chunks to get the volume up. (You're not legally permitted to sell to yourself however.) Then you proceed to buy a few big chunks spread out over time, with each chunk being bought at a somewhat higher price. As momentum buyers notice the unusual volume and price activity you hope they'll come in and push the price up further (If they don't, you're screwed, because you will lose money unless other buyers come in.) Then when the price is pushed up to the maximum (You may have to goose it a little along the way if it starts to stall), you start unloading your stock, a chunk at a time, on the way down. When the price starts dropping those who thought the stock was a good buy at a higher price think it is an even better buy now and come in to pick up what they perceive as a bargain. This lifts the stock back up, which is exactly what you want to happen. Each time buyers come in to pick up the "bargain" you unload some more of your stock, etc.

    You have to have deep pockets and sufficient buyer interest in the stock to attrack buyers (suckers) to carry the stock higher in between your "goosing" it with your own cash. Also, you want a stock that will attract some attention when it starts to move so you can generate some free publicity on CNBC, Yahoo, etc.

    A similar thing, but in reverse, works to the downside.

    It is almost impossible to make money doing this unless your manipulating in the same direction as the broad market.

    This takes very deep pockets if the float is substantial.
  5. Im talking about DIVX specifically.

    Lets take a small float stock like EFUT, one we all know by now. That is just a mass conflageration of manipulation and other things. Traders are converging on it in mass.

    In regards to DIVX, it seems as if the volume either comes or it goes. I dont think its a mass conflageration somehow. One day its hot, next day not.
  6. piezoe


    Check the insider trading, if you can. If i don't,or can't, understand the action in a particular stock, i stay away from it. In truth i am not qualified to even state an opinion here, because i have not even taking time to look at the chart. Sorry.
  7. I don't like Divx, never have never will, nor do i like RealPlayer, never have never will.