Gediminas Jasionis
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Huge Volume but No Price Action for Redknee Solutions Inc. (TSE:RKN) (PINK:RKNEF)

by Gediminas Jasionis May 26, 2011
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RKN_chart.pngRedknee Solutions Inc. (TSE:RKN) (PINK:RKNEF) probably got many traders excited when the stock showed off a massive trading volume this Wednesday. To a great disappointment though, it all ended without any real changes to the share price.

RKN share price action formed a doji candle on Wednesday even though it carried an insane trading volume of 1.2 million, or 19 times larger than the average of 63 thousand.

The price action doesn't seem adequate with such a volume, which only leads to think of volume manipulation caused by market makers. RKN price held its ground at the strongest short term support at $1.20, showing that it cannot move without a real catalyst.

There were no recent news to influence the stock, thus the volume seems out of place. RKN share price remains in consolidation since mid-May, when all the positive sentiment from earlier news had finally settled down.

redknee_logo.jpgOn April 26, 2011 the company disclosed a multi-million dollar contract, causing heavy buying on the stock market. A deal made with an undisclosed group operator allowed the company to take charge of all the billing, rating, charging and policy management of the mentioned group's international operations in Asia Pacific.

In the beginning of May, Redknee also published their second quarter results for fiscal 2011, further nourishing the rising share price:

  • Revenue rose 24% to $16.6 million compared to Q2 2010;
  • Had an order backlog of $47.1M;
  • Net income was $408 thousand, 1.8% higher than in 2010;
  • Net profit margin was affected by significantly increased SG&A and R&D expenses;
  • Ended the quarter with $15.3 million in cash and a strong balance sheet.

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