Yesterday, a tremendous trading volume was generated during the trading of O2 Secure Wireless Inc (PINK:OTOW). On the whole, 31 million shares were turned over during the day, which is fifteen times higher than the daily average of 2 million.
Meanwhile, the stock made a puzzling trajectory on the price chart. Somewhere around 12 p.m, the share price started a sharp upward march and in the course of three hours it rose 45% to $0.016. Then, a sudden and sharp downfall wiped out all the gain achieved during the day.
Eventually, OTOW closed the session at $0.012, which is 6% higher than the previous close. A notable increase in the share of short transaction was registered that day. FINRA reported a short volume of over 15 million. In other words, half of the volume generated throughout the day was made by shorters.
The most visible reason for OTOW’s dramatic one-day rise and fall was the issued press release which informed about the new division of the company named O2USA. According to the announcement, the division will provide unlimited service to VOIP customers for competitive rates. [BANNER]
In general, OTOW stock had been profiting by the overall bullish stance of the major technical indicators. The sort-term moving averages made a bullish cross two weeks ago. In addition, around the same time OTOW managed to penetrate above the 50-MA, which is also a stimulation for the long investors. As to the MACD indicator, it gave a bullish signal even earlier than the moving average, but later on tested the support of its own moving average and when it bounced off it gave an even stronger buy signal to speculators.
However, the bullish period of OTOW has stretched for more that two weeks now and many investors might think an exhaustion period is about to come, especially when yesterday a huge selling pressure was perceived at the end of the session. From another point of view, OTOW is marked with a red stop sign on the OTC market, which means that volatility is very likely to accompany the stock performance and thus OTOW can act in the most unexpected and risky manner.
