Pacific Coal Resources Ltd (CVE:PAK) (PINK:VGGGF) stock price shot up by the end of last week on possible short squeezes and broke out of the most recent channel but the reasons of such an activity remain unknown.
PAK stock price gained 7.9% on Friday under a trading volume of 3.6 million which was significantly above the average of 396 thousand. The company only had news last Tuesday, thus such an interest from traders looks out of the ordinary.
The company said on March 6, they have resumed operations at their La Caypa mine. The work was previously halted by an illegal work stoppage by unauthorized personel, as was declared on January 39, 2012. Apparently the company’s operations were at their full potential by previous Sunday.
This was the second time their share price spiked up and it carries a whole lot of risk for momentum traders because of the associated uncertainties. The comparatively large trading volume doesn’t help much because the news are old and this spike was likely a work of short squeezes which are very common during Friday sessions.
PAK hols a pretty stable support at 38 cents per share though, so the risk is mostly limited to somewhat 7.3%. But it’s still a lot for those who took their positions based on the price action at the end of Friday’s session. Technically such a move looks very bullish because of the volume and strong appreciation with the gains held until the close.
