Expedition Mining Inc. (CVE:EXU) multiday rally encountered the first serious resistance, taking away 14% at the opening today. Share price reversal could provide a golden shorting opportunity.Shares opened 14% down today as a result of overnight sell order accumulation. Profit taking is natural at these levels, as the market cap had already extended beyond $20 million. The company holds a net tangible worth of $2.8 million and has no income at the moment, thus the stock cannot hold the inflated value for long and the first red day is very likely to mark the finish line for this appreciation.
Yesterday, EXU share price stopped at a questionable resistance from more than 2 years ago. Trading volume was the heaviest recorded for more than a year and was 16 times the average.
The price rally was induced by Pinetree Capital Ltd. announcement, stating the company acquired another 1.4% of EXU common stock and now holds 14.2% in total. Extensive buying that came after this announcement was partially a result of short squeezes as well as a technical breakout through the 17 cents level.
The rally could gain some thrust from the $2.17 million non-brokered private placement that Expedition announced to have arranged on February 23, 2011. Proceeds are expected to be gathered by selling common shares and warrants units at 32 and 40 Canadian cents per piece. Warrants can be exercised at 50 cents per share. The company expects to close the offering by March 16.
