Nice pop Since yesterday there is a some appetite for risk on trade. Oil, Euro, C$, Gold in short all commodities are doing well.
The spike in share price of BANK is mainly related to news. This news could have caused the stock to tank. I have a felling that some of the investors knew that BANK would put their bid in. But some expected that BANK would be diluting their capital. While short sellers took the opportunity to cover some of their short position. Had the news release announced that BNK would issue more share to fund the acquisition then the stock would have tanked.
The good new lies in the fact the project will be funded by cash on hand & debt & no dilution in the equity. a very smart approach hence the nice pop in share price.
It seems that institutions & maybe hedge funds are very active in trading this stock which is creating volatility in the share price. During last two weeks short position of 2.8 million shares was covered. In the last three reporting periods of of 2 week each short postion has moved -1.3m, +1.8m & -2.8million this is too much of shorting & covering activity considering the low volume we had this summer. When you get the short position it is the net position for the period which means that shorting & covering would be much larger & only the net negative or positive is reported. I short this is a very good trading stock to take advantage of the swings. The only risk is that with large shorting & covering the stock can move very fast at times & one may not get a chance to replenish the position if you are long & wan to ride the move up to much higher prices.
After the last pull back the stock has cooled off & is no longer over bought. At one time is was a bit oversold. Now the chart is open for any move. The stock has to stay above $2.89 consolidate in this area & move higher. The consolidation channel of $2.89 to $3.06 or even higher would be nice. After that it has to fight the resistance of $3.34 & $3.50 when & if it breaks above $3.50 it will start the next leg up. In shock market any thing can happen. Overall market has a big impact too. But this time the stock is coming off a nice base & back filling & now does have increased possibility of breaking above $3.50. Stock can find resistance an may require some consolidation $3.50 to $3.75 & $4.00 range. If the stock runs up very fast then it will become very volatile & provide lot of trading opportunities.