Enablence Technologies Inc. (CVE:ENA) (PINK:ENAFF) stock price recovered from Wednesday’s large drop, presenting a 11.5% profit opportunity for those who found it to be oversold at the time.Unexpectedly large trading volume could have been the cause of short squeezes. The preceding price action pointed to a possible large scale collapse, thus attracting bears to join the game. ENA stock does look oversold when compared to the performance of entities with similar sales/losses, but it usually only takes one good news announcement to get the share price spiking up.
On average the company loses $9 million per quarter. Their capital budget could not support such loses for more than 2 quarters, thus Enablence constantly issues new stock to keep the business going. Long-term, shareholders were diluted nearly 55% over the last year.
Share price is still stuck below 30 cents, which limits the upside even on heavy trading volumes. The obvious resistance lures short sellers to place their orders near this levels, making it harder to breach each time the price bounces down.
The latest attempt proved that trading volumes nearly 13 times the 90-day average aren’t enough to breach the resistance. Furthermore, the company had no important positive news in a while, thus further feeding the negative sentiment towards the share price.
