Technical Analysis Update - if there was any doubt whether the uptrend line dating all the way back to the May 2005 $1.50 low would hold up, today's emphatic close below $4 removed it.
From a technical standpoint, imo the next few trading days will be critical for JAV as to whether there will be a "quick recovery" in the stock, or whether there is some lingering bad news out there.
Assuming this sell-off has not been due to a leak of impending bad news, a quick bounce back from today's low and recovery to around $4.15 (representing the next resistance/former support level) is quite possible, if not likely to me - that would represent almost a 20% snap back from current levels.
in the absence of bad news being disclosed, i think an institution forced to liquidate its holdings represents a plausible explanation given the deteriorating market conditions. on the other hand, the volume for the past two weeks of the drop hasn't exactly been earth-shattering, though it has picked up the past few trading days as the price decline deepens. is it due to the need for more & faster liquidation of an institution or due to a leak spreading of impending bad news?
a partial answer imo will be provided with tomorrow's trading - the last full day of trading until next Monday - if the overall market stabilizes, i would expect JAV to recover fairly quickly to the $4.15 level if there is no bad news specific to JAV out there...if the JAV selling continues or picks up greater steam, that would imo point to the leaking of bad news as a more plausible explanation.
might be a great buying opportunity, but the technical breakdown over the past two days gives me pause to be cautious, especially considering that the broader markets & Amex biotech index were all up today while JAV sold off over 10% on increasing volume.
