On Friday, for no apparent reason, United American Healthcare. (PINK:UAHC) made a huge volume spike giving the notion that all of a sudden investors woke up and decided to rush on the company’s stock. The rush however was prevailed by sellers who eventually brought the stock price below the previous day close.
The volume generated throughout the days reached 775 thousand shares, which is more than twenty times higher that its 90-day average of 30 thousand. The towering volume bar on the chart, however, was painted in red because of the too much selling pressure which brought the stock price 8% lower. Another conspicuous part of the trade was the lack of any short volume for the day according to data from the FINRA website.
What is puzzling in this case is that the volume spike occurred on no apparent reason as there hasn’t been any news from the company for a while. Therefore the balances get tipped towards some kind of insider activity but still this is only a reflection of the rumors spreading around discussion boards rather than a proved fact. [BANNER]
In the last financial report, UAHC showed a positive net worth of around $9 million which is roughly $1 million less than the previous year. However, the bulk of the company’s assets are in the form of goodwill and other intangibles which translates into a huge negative net worth. There is also a working capital deficit of over $1 million.
Apart from that, it seems that UAHC has been unable to provide a regular trading stream on the market. As it is visible on the chart, UAHC has gone through a lot of empty trades, and when it did trade the sessions were too volatile for the risk intolerant investors.
In this regard, traders can only guess about the reasons of yesterday’s sudden volume spike and given that there are no official pivots to build a trading strategy for UAHC stock, it is only technical analysis that can guide investors for now.
