PAYC technicals

http://finance.yahoo.com/video/5-ibd-50-stocks-holding-19000…

There was a lot of turbulence in the market the last two sessions, with many stocks taking big hits and falling below their moving averages. As stocks start to recover, here’s a look at five IBD 50 stocks that are holding above their 50-day lines: Google, Paycom Software, Foot Locker, Chipotle Mexican Grill and Constellation Brands…

Paycom Software dropped below its 50-day line intraday on Monday, but closed above that level. Shares are 9% below their high reached last week and are trading below a 39.85 buy point from a price consolidation

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Paycom Software dropped below its 50-day line intraday on Monday, but closed above that level.

To me, what happened with PAYC was just a big example of how completely irrelevant the technicals were. Clients of the firms that were handling the secondary were getting cheap shares below the market at $37.85 (or whatever it was that they were getting them at). They didn’t know anything about the company so they just sold their shares short to lock in their gains, until the price got down to down to $37.85, where there was no more reason to sell as there were no more gains to lock in. Then in a few days, the secondary will be over and the price will go back up. 50-day lines didn’t mean anything at all. It’s all about where the secondary was priced. But the real “what it’s all about” is where company will be in a year or two.
JMO
Saul

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Then in a few days, the secondary will be over and the price will go back up.

Will you stand by that prediction after I remind you the Fed might raise rates tomorrow?

Then in a few days, the secondary will be over and the price will go back up.

Will you stand by that prediction after I remind you the Fed might raise rates tomorrow?

Hi Rocko. That’s just a generic prediction, not a specific one. When there is a secondary, the stock price usually (but not always) goes down to the offering price as favorite customers of the brokers are told how many shares of an unknown (to them) company they will get at x dollars below the market. They sell those shares short and deliver them when they get them, and make a few dollars sure profit on a few thousand shares. In a case like PAYC, where there is no dilution, the price will almost certainly return back up in a week or so, so it gives us a chance to add cheaply.

Just the way I see it.

Saul

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