People should be looking to short Ad Systems Communications Inc (PINK:ADSY) stock, instead of relying on the supposedly strong support area formed after the price went down in the post promotion cooling down.There are several reasons why this penny stock is a potential short. One of them is the technical pattern called descending triangle. Though penny stocks can often pull a trick and move on doubtful reasoning, the resemblance of such a pattern is showing more.
Traders have been losing interest as the price cannot jump high away from the strong support at $0.03. The most recent trading session confirmed this with the opening and closing price being the same despite the attempts to move up during the day. With no space for appreciation, the volume has gone down as well, so the next thing to happen is the opening of space by exploring the lower price ranges.[BANNER]
Looking at what the company has been doing lately also confirms the valuation is not likely to go up. Setting up a new office is not automatically adding to the sales. In fact, with the current level of sales, adding expenses looks quite risky as the company has little cash to support the business expansion.
Ad Systems management foresees a possibility for tens of millions in revenues if their cable TV ad insertion systems expand according to the plan. However, the lack of funds is very likely to prohibit the increase in the number of subscribers from 824 thousand planed for 2010 to over 22 million calculated by Ad Systems for 2013.
