SRCH Trading On Heavy Volume
We highlighted the Henderson, Nevada based Searchlight Minerals (SRCH:OB) in our Stocks to Watch entry today, and quite frankly the trading pattern looks quite interesting. SRCH has been a promo stock recently and is fairly liquid. At the time of this entry shares are up over 17% on heavy volume that has exceeded 4.4 million shares. You should keep in mind that aftermarket late prints are included, but the activity is nonetheless impressive. Especially after today’s percentage gain.
However, the news flow has been light and I have definitely seen better corporate websites. Especially considering that SRCH is an exploration stage mining penny stock and could highlight it’s Clarksdale slag project. SRCH also has no revenues and is bleeding money, but there might still be some hope for the stock as a trading vehicle.
SRCH is trading far above both it’s 50 and 200 day moving averages. As we noted earlier today, a solid break of $1.38 could take this name up. If so $1.70 area looks like a potential next stop. Just keep in mind that there are several layers of resistance near $2 and slightly higher.
SRCH Trading High
So for now just watch the PR’s, because penny stocks are usually news driven. But also watch the technicals, because there is no news to trade, only skeptical internet articles to read. On the flip side, don’t believe the message board hype either, despite the recent massive gain. Naked short covering could be playing a substantial role in this current uptrend. Bears may have been especially interested since SRCH is associated by some to Delgratia, which is a famous old PR stock that once ripped higher and then crashed and burned.
Either way this hot spec play is one to watch, and while we won’t try to predict the stock’s direction, the name might be fairly volatile in the near future. So add SRCH to your penny stock list.
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