I was having coffee with one of my mates and he was giving me stories on Ezra and how it ran up so fast within a short period of time and how he made a fortune. That inspired me to check out the operation and do an analysis on it.
Let's forget what happened in November and let's start studying the operation from December onwards. Accumulation took place early Dec for almost 11 days, see the circled area. The were many clues that this was accumulation and not distribution. Since it accumulated for 11 days, one should expect the rally to be strong and sustain. On Dec 15th, it finally broke out of the accumulation range and starting to charge forward. Something unusual happened on this day, the volume was very high. It doesn't looked like real buying but instead selling. However, do take into account that since there was heavy accumulation, big operators wouldn't be unloading so fast and let the stock fall. Instead, they were first taking some profits, validating how much supply was left and buy as much as possible for the next few up move. And so the market retraced a little and they started more buying.
So Ezra went further up and the public started coming in. This time round, the stock was on its highway for further prices because it broke the previous resistance with strength. It went into validating and absorption mode for the next 4 days before ending where it is today at a close of $1.82. Manifesting at the whole operation, Ezra's upmove has not ended yet. It will dip tomorrow (31/12/2010) and continue it's rally towards the 1.84-1.88 range. The risk and reward is not there for now because there is only 3-6 cents more to go. I wouldn't short this counter too because i had not seen any real selling or huge profits taken by the big operators. Once it happened, I will then decide.
As for why i say that this stock is erratic? Look at the unusual price movement, there are time bombs everywhere. The moment you are caught at the wrong price, it's hard for you to get out. You will be psychology stressed and mentally strained. To punt this stock, you would need to study the operation prudently, practice good money and risk management so that you won't be slaughtered for nothing.
Ronald K
