Zenyatta Ventures Ltd (CVE:ZEN) stock price jumped up after the company rolled out a paid promotion.
ZEN stock price jumped up 55.6% under a trading volume of 4.8 million, which was 22 times the average of 222.7 thousand. The price now resides above the closest resistance at 20 cents per share.
The commotion was caused by a recent promotional article published by OnePage Media Corp. Although it was a paid commercial it still provided significant insight into the business of Zenyatta, although it didn’t contain any new information.
The current price action should be viewed as one caused by a promotion and those are prone of sudden corrections once the initial excitement runs out. It’s all about the price action from here on since the company’s business hasn’t improved just because the media published an article.
On their own, Zanyatta had no news since March 15 when the company announced to have started an initial definition drilling at the Albany Graphite Deposit in Ontario. The plan is to drill four thousand meters over the coming two months and test the electromagnetic survey results.
Their projects are in early stages of development and will require a lot of capital to complete. The company currently holds a very limited cash reserve and the additional funds required to complete the development of graphite mines will likely come from sales of stock, diluting the shareholders. That’s why it’s best to trade ZEN short term, in spite of the promotional views on their long term potential.
