Petrodorado Energy Ltd. (CVE:PDQ) (PINK:PTRDF) stock price spiked up another 16.3% on Friday, drastically extending the pre-existent rally.
The daily trading volume topped 3.7 million as PDQ hit 25 cents per share. That was more than five times heavier than the 90-day average turnover of 674 thousand.
The company has no recent news, thus this can only be evaluated from a technical perspective, and it screams of an upcoming trend reversal within a few sessions. Very often such large price jumps within the rally are an indication of trend exhaustion. As more and more buyers recognise the prevailing direction of the price changes they jump aboard, creating waves of large scale moves. This is likely what’s happening with PDQ right now.
The problem is that without a proper fundamental backbone such overextending rallies tend to expire fast and panic sellers then create large scale corrections as well. Moreover, there is a significant resistance at 26.5 cents per share that could prove fatal to this short-term uptrend.
But there is also a bullish side to consider. Petrodorado had no important updates since publishing its quarterly financial results at the end of November 2011. However, those were sturdy enough for an exploration-stage company and allow for a price increase even up to 46 cents per share without too much concern for overvaluation.
