Replies to post #9989 on SEASONALITY STOCK REPORTS

[flota]

of course that can be the case...it can go in either directions....a lot of people will take low liqidity drop as a sign of reversal but I think that will depend a lot of funementalas, short interest, trend, support and resistance levels and for every stock that is different...

different business structure
different outstanding shares
different institutinal holdings
different insider holding

bottom line you cant compare any stock to each other, it makes no sense...

[blasher]

yes Duster ... low-liquidity means the price should move easily in either direction.

I use it to confirm/negate other indicators.
If I deem a stock to be oversold with a nice base building with volume and TA-indicators starting to turn up => I look at the LR and see that it has fallen to a relatively low level. This makes me feel good about getting into it and expecting a good move in the direction of least resistance .. up in this case.

If I see a relatively high LR, I will not enter a position in the stock because it is still too much in the gambling stage without an expectation of a large move ... so even if TA tells me it looks good, if LR says not much reward available yet, I'll wait for a better risk/reward.

just my humble 2-cents worth!