H2O Innovation Inc. (CVE:HEO) (PINK:HEIFF) share price technically broke out, drawing traders attention to the otherwise vaguely trading stock.
On Friday, HEO broke above the trading channel that’s been in play since February this year. The 6.5% price move was accompanied by a colossal trading volume of 3.7 million shares, which was 20 times more than the average of 177 thousand.
The company had no recent news though, so the move was associated with the general price volatility and a technical breakout. Intraday action is rather weird and it appears as if the volume was generated on just a few trades. Such a situation could be falsified by market makers and remains somewhat of a mystery.
Continuation is possible this week, because such a breakout surely draws attention. With such a price action though, traders should be aware of morning spikes as they usually end up in large scale and quick price drops.
On the other hand, the company’s fundamental situation is slowly improving, so it has some merit for a share price increase. Out of $6.4 million net tangible value, they have two thirds of their assets market as intangibles or goodwill. Operating revenues are slowly increasing and, although the business is still losing money, the next quarter could actually be the first profitable one in a considerable streak of losses.
H2O Innovation said on June 8, 2011 they have signed a $9.4 million contract with Fort Hills Energy L.P. to build and install a water treatment package on the Fort Hill Oil Sands Project. On the same day the company disclosed to have a significant sales backlog of $29.2 million.