JRVR - Perfect Storm Brewing
The situation as it now stands with JRVR:
1. Today JRVR filled the gap precisely to 0.052, the exact close from two days before and then it snapped right back up and traded in the mid to high fives the rest of the way. This was very, very good.
2. The bottommost resistance rests now around 0.04. This would also be a very brief bounce point at which I expect heavy repurchases or further consolidation if it happens, at which point it should then snap right back up as JRVR has repeatedly done. I am confident many people will not sell now if that happens since I think enough of them understand what is happening. If it continues to trade in the fives tomorrow, I am quite certain buyers will add to their positions and add further strength.
3. But because it gapped down and bounced back almost perfectly, it may not go down in the morning at all. It may resume its upward progress now, but if in the very short term interim it hangs around in the fives, it can then trade up from there.
4. Whichever of those happens, I am seeing continued signs of strength as buys often snap up any shares sold and I see both trading scenarios above as opportunities to add to positions with so many people holding their ground to provide overall support. By Thursday, when the naked short rules come into effect, it could be that JRVR will be able to begin moving up more aggressively.
5. On Tuesday, there were sell offs in the sixes and the fives as some gave ground or recouped their principal and thus recycled their shares to mostly existing investors who added to their positions. I also expect that the MMs absorbed some of the shares to sell into the upcoming rally as well. Since I am convinced the past two weeks in OTC stocks leading up to this week showed alot of weakness not strictly parallel to general market conditions, it seems pretty reasonable to me to now assume the MMs really are settling their accounts. That could make a big difference now for JRVR as there may soon be even less shares in circulation if there was indeed a temporary artificial amount of shares in play due to the selling of JRVR on a naked short basis. That just means it gets even tighter as people bunker down. Plus, any shareholders who have already recouped their principal will be more inclined to hold for higher prices with their remaining free shares.
6. As the strength holds and committed buyers come in from 0.05 to 0.07, the support price has been progressively rising. I speculated that the bottom is probably at worst around 0.04 at the moment, but it is likely it is about to become closer to 0.05. At the same time the resistance point leading to blue sky conditions has come down. This is excellent since the methodical build up on strength is creating a condition of the support rising up to meet the lowering resistance price point which is like a vice closing in on the share price. When that happens, it could trade in a very tight range right before it
breaks out.
7. The longer this continues throughout this week and even into next week, it actually creates a tighter and tighter coil of energy as the distance between the support and resistance could then become as little as a few cents apart. If it continues in that fashion, support continues to solidify even higher and more explosive potential gets built into the stock and the ability for JRVR to run even higher becomes greater. As of the close today, the resistance point appears to be dropping. Whereas I previously identified 0.13, it now seems closer to 0.09. And the top may be now higher than before if this continues with further consolidation into strong hands. One blue sky number from before went up to 0.20, but now it may be closer to 0.25. And if heavy buying continues on a run right up to 0.25, JRVR could trade as high as 0.50.
8. So this means that (1) a quick drop in price or shakeout would be good for the stock for the rest of the float to go into more strong hands and (2) today's close below the opening price worked out better to facilitate this scenario than if it had popped today. In essence, the perfect storm keeps brewing as long as investors hold their ground. And it means if there is a drop in price now, it is the perfect buy signal.
9. The time frame is now actually best phrased as: it is just a matter of time. That means the strength will prevail and the Bid will soon rise to the resistance point. It no longer matters if it happens tomorrow. Like I said, the longer this builds, the bigger the payoff can become. And the longer the build, the closer it can conincide with the potential for a positive PR from JRVR which could blow it wide open as people who have held up to that point will know blue skies can mean beyond 0.25 if they hold the majority of their shares to make new buyers pay up. Plus, if the MMs have not settled their accounts yet, they will add to a buying frenzy to avoid paying any more for shares than they have to in order to settle their accounts. Selling JRVR now to roll over funds into another play misses that opportunity as it can come anytime now. Either way it will be available to us in April with maybe the opportunities for additional runs as there could be many free shares remaining in strong hands after the first run thus providing a stronger subsequent support level.
I hope that helps.
Cheers,
IvG
