The news that hit UKH this spring was sudden and unexpected. The stock had made a medium-term bottom at $1.10 in January, 1997, and was on its way back up, punching through the resistance level of $1.30, before topping out at $1.70 in February - before pulling back again - a normal pattern on an uptrending stock. Investors were anticipating funding for the reopening of their mine. Normally, it could have pulled back to as low as the previous resistance level of $1.30 before resuming its climb, but on the day before the bad news was out, it closed at $1.25 on little volume - nothing special for a thinly traded stock like Keno, which doesn't chart too well anyways. The next day, it resumed its upward climb, reaching $1.42 before trading was halted. The unanticipated news was released (its major financier had withdrawn its support), and the stock plunged. Being thinly traded, it fell all the faster, bouncing up and down until bottoming out around 0.45.
Memories of this scenario may be what is holding Keno back from zooming up at the present time, as THIS TIME around, investors are probably waiting for the funding news to be released BEFORE committing themselves to buying more stock!! However, once the funding is proclaimed, UKH will probably zoom up as quickly as it zoomed down this March!!!
Charts normally do not show insider trading activity, but certain patterns raise alarm bells, and therefore charts are still good to help out in TIMING your purchases of a stock. Thinly traded stocks are the worst charting candidates, because of their exaggerated volatility. It makes the charts harder to read - like having the gain or squelch control on your CB radio turned up too high!! :)
Harry K.
... |
