3SOF

I expect a very strong run from here into the CES next week and Macworld the week after.

Traditionally and historically, ONT has performed very well at the end of the year and into mid-January.  Last year it did even better, up 5X starting from December into May.

Well, a shame to see that was a false breakout/recovery and instead a quick end to ONT's second run.  I got stopped out on the way back down with a small loss.  A weak end to the week as well; the weekly chart looks even worse now with a second large red candle:

http://stockcharts.com/h-sc/ui?s=ONT&p=W&b=5&g=0&id=p54379445690


No new news from the company this week but I think I know why the stock was down the past couple days...  There was a lot of discussion on one of the other boards about how Adobe released a special new "Flash Media Encoder" that does On2 video, but is being given away for free.  I don't follow all the ins and outs, but there was a lot of talk on how it might be cutting under what On2 offers.

Anyway for the stock, looks like a further retracement but might have one more bounce left in it around $1.00, we'll see.

Quote from: Melf Elf on January 11, 2007, 04:59:56 AM

Quote from: stockster on January 10, 2007, 08:22:27 PM

Melf, where to from here, you think?

...
1.27 now is the number to beat on the upside, to get ONT back into shape for further rally.

1.28 would be an upside takeout of the TWO Left Shoulders, which would look bullish.

Melf, you called it perfectly again!  ONT has been acting very bullishly the past three days, and today did exactly what you said it needed to : closed above the previous mark to morph into a very bullish pattern...

What do your charts say now?  I'm seeing $1.70 as being IN PLAY now on the upside, especially with this analyst upgrade and target increase...

No, I thought it might have a shot at that, but then I read last week how Joost ("The Venice Project") uses an H.264 (competing) video codec:

http://newteevee.com/2007/01/11/venice-project-mozilla

I know, I saw that:

http://stockcharts.com/h-sc/ui?s=ONT&p=W&b=5&g=0&id=p54379445690

Big red candle, with largest red volume on the chart...  So, I am cautious.

Laker, SIRI does have their own video solution that they showcased at CES and I read they were planning to launch it this spring.  I believe it uses Microsoft codecs.

XM on the other hand seems to be backburnering their effort for the time being and there is some speculation that's because of a possible merger (and thus needing only one design).  I myself have doubts that a merger would ever be approved by the Feds - the situation with EchoStar and DirecTV was very similar and didn't pass muster.  Interesting to talk about though, and we'll see.

Anyway, good weekend guys, and see you next week.  I'll be interested to see if Melf has any further thoughts after today's trading.  I bet he's fractionally more positive on it because of the small up day, but I bet he also doesn't like the extremely strong resistance it faced at the right shoulder - it looked a little "toppy" to me, the same sort of intraday action it saw on Monday.

Out at $1.25.  There is an titanic wall at $1.26/$1.27, just like Melf forecast...  Could indeed be the right shoulder; if so, it could pose some challenges.  I thought it might have the strength to get past, but so far after hours of trying, no.

So Melfster, I owe you another one - thanks!!

Laker, no offense, but ease up a bit...  On this page you've got 8 consecutive posts.

I'm back in at $1.19 on the afterhours Digital Rapids news and the CEO article referencing YouTube.  ONT got back its legs.

Out at $1.19 ... +14c in 4 hours!

I was thinking of holding for a test into the $1.20's, but did not like the look of that massive wall (as boatguy put it) of shares for sale at $1.19/$1.20...

Melf, I really owe you one.  You painted this perfectly - knowing where the critical levels were at $1.10 and $1.20 was absolutely key... 

I have a request, could you please PM me your email address as I'd like to send you something as an expression of my gratitude!

I had sold in the $1.40's and am back in at $1.05...

Looks like it's hammered out a solid bottom and is already trading back above the $1.10 level...

This is such a repeat of last year, the updraft was identical and the downdraft was identical.

Last year it pulled back at $1.48, this year $1.43.

Last year it stopped its pullback at $1.05.  This year, $1.04!


Thanks a lot Melf for all your insights and play-by-play, I owe you!

You were definitely part of one of those quick spikes down then - sorry to hear!  Man, that's a bummer - you essentially got robbed, and I would complain to your broker...

Here were your shares, here's your evidence of a poor fill:

http://i14.tinypic.com/2psefpd.jpg


So unfortunately this also means those downdrafts were "real" and not misprints.


As an aside, I see you're paying $10 commissions, and maybe you could use a new broker anyway.  I just read about this new brokerage that offers $2.50/trade flat/unlimited shares with decent margin rates and money market interest rates - I'm looking more into them:

http://www.just2trade.com


Anyway, tough day for ONT.  Melf, where to from here, you think?

Yes, that puzzles me too, since the low for the day without those spikes was $1.10...

Of course, it looks like it closed only a hair right above that, at $1.11...

Which would mean if the selling pressure continues unabated tomorrow, then we may be looking at what Melf said earlier?

QuoteSo far, all we've accomplished on the spike to 1.20 is to fill the gap from yesterday's 1.20.

If we don't do anything more than that, and stall around under 1.20, or even rally below 1.26 (the high of the Right Shoulder), then break below 1.10, that would complete the H&S Top, and a target of $0.79 IN PLAY.

Math:

1.43 - High of the Head

1.11 - The more conservative of the 1.11 - 1.10 neckline

1.43 - 1.11 = 0.32 = Target: $0.78 EDIT: Sorry, it's $0.79

That, essentially, would be a Parabolic Return of the recent Parabolic Rally, like XNN had yesterday.

In any event, it looks like we may need to test $1.00 tomorrow, from my glance at the chart...

Melf, et al:

This was posted on one of the other boards.

http://i14.tinypic.com/2psefpd.jpg


Looks like two large blocks sold at multiple fill prices lower...

Boatguy, where did you get stopped out?  This thing is all over the place... 

What was that enormous "snap" downdraft to $1.02?  Is that what took you out?  It looked like it might have been a dumped block that jumped past bids...

Thanks a lot for your views Melf!

One thing I note, if history is any guide (and it often is with ONT), that last year on the first day of the CES, ONT hit a high of $1.48 (this year $1.43, Monday) before turning around.  Then on the second day there was still no news and ONT had an intraday low of $1.18 (this year $1.16, yesterday).

On the third day of the CES (today), last year ONT reached a low of $1.05 before truly bouncing.  So in sum last year it fell a total of .43 before any good tradeable move.  We'll see what happens today (an equivalent amount would put it close to $1.00), but I suspect if there is still no news from the show (same as last year), there could be more heavy selling.