Gediminas Jasionis
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Dacha Strategic Metals Incorporated (CVE:DSM) (PINK:DCHAF) Is Breaking Out

by Gediminas Jasionis May 25, 2011
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1dsm_chart.pngDacha Strategic Metals Incorporated (CVE:DSM) (PINK:DCHAF) stock soared on no particular news as short sellers likely got squeezed out of their positions. The rally doesn't have the necessary components for continuation though.

Stock price added nearly 14% on Tuesday, generating a significant trading volume of 1.7 million. That was 4.4 times the average of 384 thousand.

The company has no recent news that could have induced the increase in trading activity. The stock basically pushed above the resistance at 48 cents, thus possibly creating short squeezes along with the usual buying on breakout.

dacha_logo.jpgThe intraday price action resembles that of short squeezes as well. A quick price appreciation in a short time frame is followed by a period of consolidation showing there was virtually no profit taking. Such an outcome leads to think that most of the action took place on automatically filled stop orders.

The price got near the half a year high of 60 cents. It could be meaningful from a technical perspective, but since there is no real catalyst to this action the buyers aren't likely to start pushing DSM further up.

From a historical perspective the stock is prone of sudden rises and slow declines. This is very likely to repeat one more time.

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