Enablence Technologies Inc. (CVE:ENA) (PINK:ENAFF) price rally lost the volume support yesterday. The situation might disrupt the so far successful 30% climb.
ENA added another 5% yesterday as the stock price continued to go up on a short-term rally, made mostly of doji candles. The trading volume was outstanding on Wednesday – topping 7 million, way above the average of 1 million, but didn’t manage to keep the momentum yesterday.
Despite the unusual form of the price rally, there are no strong resistance zones until roughly 17-18 cents, meaning another 54% gain could happen from this point. On the other hand, doji candles mean there is no consensus among traders. Also, there were no news from the company, thus the move has no real catalyst in support.
The price was going up supported only by technically strong trading volume. Earlier attempts of similar rallies had failed quickly. As the volume already diminished on this one, traders will likely see correction rather soon.
The company’s current market cap of $46 million is still 4 times above the underlying book value of roughly $11 million. Large portion of their assets is intangible, or described as goodwill, which lessens the real value of the business. This leaves space for price depreciation and the $44 million loss over the last quarter further strengthens the negative sentiment.
