Mesa Air Group, Inc. (fka MESAQ)

[Wheeeeee]

Thats why OBV and other volume indicators are so usefull
OBV is simple:
Start at 0
Add total volume of day if it was an up day
Deduct total volume of day if it was a down day

So when people are accumulating OBV goes up
When people are distributing OBV goes down.

However it is important to notice how much the OBV moves up and down. Lets say that avg volume is 1 million shares and that the price moves up 50% on 10 shares. Then that would mean that the price made a big move, but the obv did not. Meaning that the move is not real.

Now applied to Mesa.

We saw HUGE volume on the upmove and minor volume on the downmove. The stock went down from 0.2 to 0.11 and the OBV hardly budged.

The only explanation that I can think of is the float dry up which allows for the stock to trade like a low floater. If there are only 50 available shares than that means that a 10 share buy could rocket the price up (or down).

I have not backtested my next statement:
I have the feeling that there is increased volatility right before a stock makes a real move. As sellers and buyers run out it means that there wont be people selling at my bid or the other way around. So the only way that a stock can make a directional move is to have one side of the trade (albeit bull or bear) to increase its buy price (or low its sell price) up to a point where the other side of the deal accepts to trade.

So normally shares flow freely in the price spread. But as shares dry up the spread becomes irratic and jumpy. Much like a low floater.

EXAGGERATED EXAMPLE NOT RELATED TO MESA!
In short it is possible that a stock of 100 million float with 1 million shares free to drop 80% on 100k volume.
The fewer shares are available the easier it becomes to slam a price down (well only if there are no big sizes on bid).
By slamming the price down people get spooked. They dont realize that it is happening on low volume and they start selling. That leads to an increase of volume and an accellatated descent.
The exact same is possible in the inverted sense. It is very easy to drive a price up when the volume has dried up. This is the kind of movement I prefer. Because such movements happen quietly and people will miss it untill it is nearly too late. Then people will flood in and buy the top driving the price up alot.