Yesterday on CEO.ca we had an exciting market close as Alset (ION.V) released an NR at 3:52pm after ION shares had been roaring higher to the tune of +60%. It's not hard to see on this 2-minute chart that ION began catching some upside volume just before 3pm EST which then accelerated about 20 minutes before the company news release at 3:52pm:
ION.V (July 11, 2017 - 2 minute candlesticks)
From my vantage point the release in itself wasn't notable, however, perhaps the market likes the fact that ION is becoming an area play in the Zacatecas region of Mexico.
A well known chart poster on CEO.ca quickly took a victory lap following the ION news release proclaiming that his chart reading had foretold the news, and the price spike:
Let's take a look at the chart heading into yesterday's session:
How's that look to you? Clear downtrend as the stock rests on the $.10 support level with hardly any trading volume. Does it look like the market is expecting good news to come? Not really.
Do markets and stocks have a tendency to trade in cycles? Yes, sometimes. Many markets including gold and oil for example have seasonal patterns. However, these seasonal tendencies can drastically shift in a given year due to any number of variables which the market suddenly gives more credence to.
The fact is that ION has a tendency to spike higher every few months, and so it did it again after spending the last couple of weeks resting at support barely trading any volume at all (ION traded ~80,000 shares between July 6th and July 10th, less than C$9,000 worth of volume). In no way did the market foretell that "good news" was coming.
After all, the chart is a visual depiction of supply and demand in a given market. If market participants believed that good news was on the way the demand for shares would increase and the chart would depict this increased demand via increased price and volume.
Yesterday we also saw a REAL breakout in a very real stock, SBB.TO:
SBB added more than C$40 million in market capitalization (multiples of ION's total market cap) with yesterday's 9.2% surge as price broke out above key resistance near C$2.00. If there is such a thing as the chart foretelling news SBB's chart would be an example. The chart is telling us that the consensus of market participants believe that NIRB (Nunavut Impact Review Board) will issue a positive recommendation for Sabina's Back River Project. Let's see if the chart is "right"....
Disclosure: Author has no position in ION shares at time of writing and author is long shares of SBB at time of writing. Author may buy or sell shares of ION or SBB at any time without notice.
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