Gediminas Jasionis
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Fireswirl Technologies Inc. (CVE:FSW) (PINK:FRWRF) Hits Multiyear High

by Gediminas Jasionis May 31, 2011
fsw_chart.pngFireswirl Technologies Inc. (CVE:FSW) (PINK:FRWRF) continued to hit new highs on Monday on increasing trading volumes and keeping the momentum from last Friday's breakout.

FSW share price jumped 20.9% on Monday and finished the day at a new multi-year high of 52 cents. The stock's only been higher in 2007 when it traded around $1.5. Trading volume reached 1.7 million for the day, more than three times larger than the average of 468 thousand.

The price continued to rally after it broke out on Friday, passing above the last resistance at 39.5 cents. The company has no recent news, thus the breakout was purely technical.

The lack of catalyst though points to additional risk - it is unclear for how long the stock can rally. The first day of decline is usually a good top out indicator for such rallies and it is what most short sellers will be looking for.

fireswirl_logo.jpgThe only news that could still have influence on the stock was issued on May 18, 2011 when the company published audited year end results for 2010. The filings didn't cause any immediate reaction on the stock market back then, and it remains questionable if the stock can rally far on such a controversial financial update:

  • Working capital dropped 36.3% to $1.2 million;
  • Revenues were $20.3 million, 4 times larger than in 2009;
  • Net loss decreased 18.5% to $880 thousand;
  • Dilution rate was 31%.

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