Fellow Investors,
USA Graphite (USGT) shares rebounded on Tuesday following a company press release after the close on Monday stating that USGT had signed a letter of intent to acquire a third graphite property in Nevada. A late round of buying pushed the share price to close at $0.75, the high of the day. A close at the high clearly shows that the bulls are in charge and bodes well for the next couple of days! There is alot of energy in this stock and we expect a big run up so act quickly!
Tuesday's rebound came after two consecutive hammers formed on the daily chart. This unusual formation is a highly credible sign that last week's down trend has come to an end and we are now back in rally mode.
Short sellers, who were very much in evidence during last week's downturn, were sitting on the offer all day around the $0.72 level but could not overcome solid buying interest from investors, so now is a great time to join in!
Despite the good news on Monday, USGT traded in a very narrow range of $0.71 to $0.72 for most of the day on Tuesday. Remember, there are several million shares short at much lower prices—below $0.55 for the most part—and the shorts are feeling the pain right now.
It appears as if last week's shorts were trying to hold the lid on the USGT share price at $0.72 but they were defeated by strong buying which pushed the shares higher in the final minutes of trading. It looks like the shorts have run out of nerve, borrowed shares, money or all three, so USGT could open sharply higher on Wednesday, particularly if the shorts start to buy back shares to cover their short positions. We could see new highs on USGT so these price levels are a great opportunity for doubling up!
USGT
closed at $0.75 finishing above the important 20-day simple moving average ($0.7396), which had been a resistance level for most of the day. As of now, that resistance has become support, which should set the stage for a solid rally on Wednesday.
USGT is in a perfect set-up for the resumption of the rally. You have positive news from the company, a positive daily chart, a huge short position that is in trouble and needs to be bought back. What more do you need? Don't hesitate. If not now, when?
Happy Trading!
Disclaimer: http://lookpic.com/O/i2/1355/xI0IDPtH.jpeg
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