Astute investors "know" that a stock's price is likely to climb hard after breaking a strong resistance level. This has occurred today. The more investors that recognize that fact, the more short covering there will likely be lining up to take the stock higher. And the more short buyers there are the more buying both in covering and regular buying will propel in this case CSLN toward a blue sky rally above $6.09. Blue sky movers move up fast and in .20 cent to .40 cent jumps. Soon no more buying under $6. This has a reason to go higher let the weak hands out and future runs will be faster and stronger. Let rookies learn.
Demand for the stock goes up, short sellers are "squeezed" out as they are stopped out and are forced to buy the stock to cover their short positions, creating what we affectionately term a "short squeeze." Everyone who thought they knew where the ceiling (resistance) was, no longer holds a position in that stock. What once was the ceiling becomes the new floor, or support level.
Once a stock breaks out above strong resistance, it takes some time to create and recognize the new ceiling. Short sellers become less likely to step in because they can no longer anticipate where the stock is likely to "bounce back down." RightLine readers are familiar with the term "blue-sky territory" or "blue-sky breakout." We use the term blue-sky to indicate when a stock breaks above all previous resistance points.
If this breaks $6.09 next weak I would be surprised if $7 did not fall after all this will remain in "Blue Sky" easy move territory once over $6.09. Analyst call are conservative and this should be in the teens before Jan. at least $12. Really not much chance this news is not going to propel this to the analyst who called $18 level and beyond after the report on the trial is released after all this is a phase 3 trial.