Chart update on ELED
First is the chart I posted in the comments a week ago. As we can see the support at the 50-day moving average gave though.
The second chart will show an example of how this drop could have been predicted. As you can see on the second chart there was a decline in volume. When a penny stock comes down to a level of support you want to see buying volume start to increase. Buying volume helps power up the support and brings new money in which builds momentum that can push the stock to the next level of resistance. Once a level of support gives fails it becomes resistance. Likewise, once resistance is broken through it then becomes a level of support.
As far as the future outlook on ELED chart wise a positive sign would be to see a bounce to .02 with double the average daily volume you have seen over the last week. You would most likely hit resistance at .02 get denied once and need to create a triple bottom at .015 range. If the 3rd bounce off of .015 also had an increase in volume you could see a bounce to .03 and test resistance there. On the flip side, If support at .015 doesn’t hold ELED will most likely come down to support at around .01, most experienced traders would load ELED in the .01-..0115 range and then flip it at resistance around the .014-.015 range.
Again this is just my opinion. Everyone should make their own buying and selling decisions.
Is Exeled Holdings INC. (OTCMKTS:ELED) being naked shorted?
In our opinion we don’t believe that it is naked shorted. That usually just happens with commodity ETFs. Naked shorting sucks because there is nothing you can do about it. Market Makers will short a stocks like ELED because of the enormous break out it has already had. Having a market maker or a trader short is much better for investors than having it naked shorted. The reason why is they are more limited in the amount of time they can short. If their shorts don’t cause panic and major sell offs then the shorters will get very nervous. If some major rumors or catalyst come and the stock has built enough legs you will have the potential for a short squeeze.
That is what happened last year another Marijuana stock. The stock started out sub penny and ended up over 25 cents a share. Once you have the float locked up on a penny stock the only real enemy is if there are note holders selling or CEOs either increasing the Authorized shares or doing a reverse split. If either of those happen that is usually when you want to quickly exit the stock. That is why it is important to read the SEC filings. Here is a link to teach you how to do that. https://awesomepennystocks.com/learning-sec-filings/ The only other thing to watch is the Level 2. On the level two you want to learn to be able to tell the difference between someone selling a Note (toxic financing) or someone who is shorting. If MMs(Market Makers) are shorting they will be on both the bid and the ask. I have also put together a short training for reading level 2 at https://awesomepennystocks.com/reading-level-2/. It is always good to learn as much as possible when it comes to penny stocks. There is a lot of money to be made and also a lot to be loss.
As a group I always encourage being completely open with each other. Don’t criticize someone who ask questions even if they appear to be negative. Skepticism is good to have as well. Smart skeptical people help a group out and also help bring in big money investors that are more analytical with their decision making. With that being said there is a huge difference between an educated skeptic and someone that just bashes everything without backing up what they say with something you can read and learn from. In penny stocks there are people that get paid who have fake aliases to both bash stocks and to pump stocks. Each stock will most likely have a few paid promoters/bashers working both sides. I haven’t had a chance to dive in and read ELED sec filings but I would recommend doing it even if you are new. Our SEC Filings free training link shows you how you can search for a company’s SEC Filings.
As far as ELED is concerned shareholders should actually be rooting for the stock to stay in the .014-.02 range for the next 2-5 days. Especially if the great volume keeps up. If you go back in time when it was in the .003-.004 range there were a lot of investors who were scared thinking that it had peaked. What they didn’t realize is the stock was forming a leg. At the .004 range it formed its B leg. This is where the stock developed solid support. It had it’s traders that bought from .0008-.0013 (Where Obi Mbawuike first alerted it) and sold it from .003-.005. So new investors and savvy investors that understood it was developing legs bought at the .004-.005 so this was the new base. You want to see a new base or leg happen from .014-.02 This will allow anyone who is on the fence on whether or not they want sell to get out and take profit. As long as there is enough buying power to absorb the flippers shares and to lock in the short sellers it will develop and that is where magic run number 3 can happen.
If enough shares get locked up from .014-.02 What will happen is there will be a share shortage. Meaning that most of outstanding shares will be owned by people not willing to sell and the remaining shares will be hard to get. These creates a supply and demand surge. If an unfortunate market maker shorted 1 million shares at .015 hoping he could cover at .01 and make 50% from a sell off and the stocks does the opposite and goes up that Market Maker gets stuck in a short squeeze. The Market Maker has to buy back 1 million shares in a limited amount of time, and since they have taken the high risk of shorting a penny stock they usually have to a lot more money (sometimes millions) sitting in their margin that they can’t touch just incase things go bad and they guessed wrong. When a penny stock shorted at .015 quickly goes to .03, short sellers will start covering their shorts which means they will be taking quick losses and buying shares at the .03 to cover. Well when you buy a thinly traded stock fast its price shoots up even higher! When happens this creates a buying frenzy also what we call a blue sky break out. Now the Shorters who didn’t buy back quick enough will have Margin calls coming in. This is where their brokers will automatically start buying shares to cover. Most will also have stop loss kick in which will trigger and you can see penny stocks have unbelievable gains. Now an example of this happening was CYNK Technology. The stock went up 24,000% So investors lucky enough to buy $10,000 in shares when the stock was at the bottom saw their accounts go up as high as 2.4 million dollars! Now short squeezes like CYNK are not typical. That … Read More