While typically investors rely on a combination of fundamental, technical, and macroeconomic indicators to help their investment purchases, in the case of Pegasus Wireless Corporation (PGWC), the stocks price seems to abide by only the technical features of price and volume. Found in the technology sector as a company focused on providing wireless networking, recent volume increases have led many to take special heed on the volatility this particular equity is engaged in.

With a beta of near 16, the company has experienced recent ups and downs concerning its price over the last few weeks encouraging a risky situation for potential investors. While the stock may not have the same risk as buying a Milken junk bond, the small cap stock does have an immense interest from potential investors looking for a quick profit. Down from its high prices of 2002 of nearly $1200 (adjusted for splits and dividends) to close to $7.00 currently (July 2006), Pegasus presents itself as a great buying opportunity. Looking at the fundamentals such as its P/E ratio of nearly 900 and its EPS of 0.01, the situation may seem meek in terms of placing bets for this stock, and having only mediocre cash flow growth and decent revenue growth only add to the negativity of purchasing this stock. While the argument is valid and can be ascribed to the falling prices experienced over the past few years, with increased volume there is a different attitude towards this stock which rests on technical analysis.

Unequivocally over the past few months especially, this equity has had ups and downs which could have unequivocally provided an investor with nearly 50% capital gains or losses in a period of less than a month. While some may argue that the trend is strictly based on the market fluctuation of supply and demand, the occurrence of almost equally spaced out opportunities equate itself of being something of note. With a standard support level of near $4, and a resisting level which has fallen but still remains close to the $10 mark, the question now does not concern at what price is the best for buying the stock, but how long will it take to complete this almost cyclical pattern.

While some may say that the stock is closely following economic news in the form of interest rates, pressure in the Middle East, or increasing oil prices, the situation that the equity presents is an uncommon one and lends itself to believe that technical analysis may have more validity than originality argued for especially in relation to fundamental analysis. While I cannot confirm if the stock will continue in such a cycle, I do recommend taking special notice of the price in the next few months to see if it continues this journey, and I also recommend that this small cap stock as a buy at any price between $4-5.