Look no futher than to the 10% short ratio and then follow the footprints to who's to blame and you will find the source of the manipulation. Good news and better manipulation can turn daytrader bulls and create an overall bear reaction. As seen here.
Someone is just throwing out an ask unlikely to be filled easy and scaring out short term investors.
Longterm, the short position will have to be covered unless a company goes under. Usually a short hedge fund will try to get into a shelf offering. Some that want out will present themselves to a company that can use money.
The stock is oversold and this is a gift to all looking for a position. I'm looking for the pattern to reverse here and regulate in the same range it was in before the perelli news and sway from the 2.50-2.70 range into earnings.
Last Thursday I thought I might buy some shares and also take another look at the market mechanism that surrounds CDTI. It may not be the Marx Bros, it may be the the market maker which is working to keep the stock price down. The stock continues to trade at average or slightly above volume. Here is what happened..............with an ask of $2.38 and a bid of $2.34 I decided to offer $2.38 for 2K shares. Upon placing a limit order the ask immediately went to $2.39. And a 5 minutes later the ask was at $2.41, and then I believe $2.44.........and I believe there were some sort of trades at those $2.41, maybe $2.44. My 2K order was not filled, but was used to send the stock price artificially up and above my offer of $2.38.
About 20 minutes went by and I checked in and the stock was then trading at $2.34, with a bid of $2.34, ask $2.39. So I thought, oh, I must of bought some shares. But although the stock was trading at $2.34 my order still did not fill. OK, maybe the order book is really that thin I thought. But why pay $2.38 for a stock that is being posted as trading at $2.34? So I went to cancel my buy at $2.38....................and like magic the market maker filled it at $2.38.
It would seem that the market maker is sending out false perceptions of where the stock has a valid buy order, thereby creating false perceptions of any potential new money wanting to enter, or any sellers wanting to sell. But clearly the market mechanism was not posting my offer to buy at $2.38..................until the attempt was canceled and the market maker choose to distribute shares to me as the stock closed at $2.34.
If Perelli is a good partner they will likely take the CDTI market cap unresistable and work toward an aquisition of at least a share of CDTI. I would not bet the house, but this is a good gamble here.