Light volume pause week in the books
With the trading week cut short by two days and only 3.8 million shares exchanged for the week we are right where we left off last Friday.
The highlight of the week was the power outage at Knight Trading which took NITE off of ask for most of Wednesday and threatened a breakout on the daily chart. The bears scrambled to find other MM's to hold the price down and had their minions on iBash fall in line on the scary story to keep things from getting out of hand.
When a stock starts to move, that gets the attention of people, most notably retail and penny stock flippers. Plastering a message board with nasty comments as a breakout threatens is just another trick in the short sellers bag.
Fortunately, there aren't really many flippers in this stock just bears trying to push it down and bulls accumulating ahead of a catalyst.
On the chart below take a look at how the 200 week moving average has held up like a brick wall. Yes it pierced a few times, but that is where the stock gets defended with big volume. Also notice that on the lowest pane, the weekly MACD illustrates that the crosses to the upside coincided with rallies every single time.
We have a daily cross on the MACD, and though the stock moved up it has yet to really pop. The weekly shows that it has flattened out so selling momentum is gone, and what we are looking for now is for buying momentum to take over.
I'm going to be conservative and just say we hold this trading range on a weekly basis until we get financials, or some kind of confirmed news on an increase in bopd production from any of the multiple sites. We are down the home stretch for the 10 Q so I doubt that the bears will commit too much on a raid, and will just to keep the stock from breaking out.
The initial short squeeze, when it happens, won't be the one that kills them. It will be their follow up attempts to reshort, and failure "pick the highs" as the stock continues to trend higher, that eventually blows them out of their accounts.
[IMG]http://i.imgur.com/d5Tjw.png[/IMG]
