The chart is looking great. The stock has been in a nice uptrend since the first of this year. Going back a full year, it has formed a perfect cup. If it consolidates here for a while, especially with a slightly negative bias, we'd have good handle action too. Cup and handle quite bullish as you know. Not saying it will, who the hell knows?
Interesting too that stock traded between 5 and 6 dollars in HUGE volume for the month prior to earnings, and has traded in miniscule numbers ever since, meaning sellers at these levels are relatively hard to find. Probably not selling here because where the stock is now is right where they got in. Like we saw all of last year, it only takes one or two to take it down. What with insiders exercising their options pre-expiration the last few weeks, the added supply of stock isn't helping any.
The fundamentals are improving a little too slowly for my liking, but the price and volume action is very constructive and the chart is shaping up nicely. I'll give it some time to see what happens, but if I had to bet on it I'd say that IF the overall market action is supportive, the stock could tack on a few more dollars.
Technically, you are correct. However, the miniscule volume, market cap and depth of this business make technical analysis virtually meaningless. The uptick in volume over the last few weeks is interesting, maybe surprising is a better term. Any rumors floating around about potential buyout or merger with someone bigger? That would be a better explanation than those supported by their performance.
Since you asked, I have heard some chatter about a buyout. In a consolidating industry it is certainly a possibility. Think the CEO said he wanted to get the stock back into the teens, though, before he'd consider anything.
But the whole point of my post was really about the volume last month. The volume is what drove the price of the stock to its current level and there's no denying the shares that were bought are in a whole new set of hands with an average cost somewhere in the 4's or 5's. I think the big change in daily volume makes the chart action pretty significant and at least worth watching. If you didn't know anything at all about the company and somebody just showed you the chart, you'd probably say something positive was happening.