Habanero Resources Inc. (CVE:HAO) (PINK:HBNRF) spurt up on Wednesday but ended the session with only minor gain as no clear reasons for buying surfaced.
HAO gapped up 5.9% but ended the session at the same price it started. The accompanying trading volume looks promising at 4.8 million, which is 7 times the average of 687 thousand. If it decides to go higher, the price would encounter resistance at the 200-day moving average which currently stands at 9.5 cents per share.
Habanero didn’t have any news out, so it could have been short squeezes that caused the buying wave. Last week, the company announced to have increased their land position by 11 thousand acres at Grande-Vallee North Aluminous Clay Prospect in Quebec. HAO stock price reacted to the news and jumped up, but failed to cross resistance at 8.5 cents and with fading volume short sellers clearly started to build up.
Some additional strength for the initial buying might have come from Obite Inc. (TSE:ORT) conference call which was held to discuss preliminary economic assessment results on their property located 23 km from Grande-Vallee.
Despite the reasons, the technical situation suggests traders should be cautious. The end of day sell-off showed that professional traders are playing safe and are not ready to boost the price higher.
