Axia NetMedia Corp. trending to a retest of support at $1.40

Mar 16th, 2011 – Comment

The three year chart at best indicates that AXX will retest support at $1.40 given the gap down in March of 2011.


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Hi Lou:

I enjoy reading your comments. I cannot see selecting a security by technical analysis, but I see merit to using it with limitations to assist timing in and out decisions.

I made a tidy profit by buying AXX in March/06, and selling half in June/07. Axia Net Media tanked in the recession along with most everything else, but has not come back like the rest of the market. I’d appreciate your thoughts on holding or unloading the rest of my Axia shares. To me it still seems to have potential, but how long to wait ……??? If it means anything, I am a small investor, this commitment is very small, and I would put the cash into other stock.

I look forward to your input.

Thanks,

Jay

 

Hi Jay,

Thanks for the assignment. Axxia NetMedia Corp. ( AXX TSX) has been trading in a range for the last two years with support at $1.40 and resistance at $1.85.You should also make note of the thin volume that has been the tale of the tape. The average daily volume over the last three months is 28, 484. Yesterday the stock traded 2,100 shares.

You will not see a move higher unless investors are willing to step up and a measure of that intent is volume.  The charts will provide some guidance in helping you make a buy, sell, hold decision.

The three year chart at best indicates that AXX will retest support at $1.40 given the gap down in March of 2011. I looked at the quarterly reports for the company and made note that the entire enterprise generates less than $100 million a year in revenue and has a market cap of $98.23 million. Clearly we are talking a small cap player in the universe of broadband networks.

The six month chart illustrates the selling that is leading AXX to a retest of support at $1.40. Given the thin volume, small market cap, and the fact that you have already booked a profit on the stock I would suggest that you bite the bullet and get your money working more productively in another opportunity.

Happy Capitalism!

 

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