From Sparky: Saturday 04/03/04 10:45 pm cst
Sparky's Thoughts About UGMI ...
It was on March 15th, fifteen sessions ago, that Sparky recommended the accumulation of UGMI shares. For about a week before this, and on a daily basis ever since, Sparky has closely monitored UGMI's Level II and overall trading.
That said, Sparky figures way too many UGMI shares have allegedly changed hands during the past three weeks!
Let's start with the basics: UGMI has about 40 million shares outstanding, and a float of about 17 million, of which only around 10 million are supposedly free trading.
In the full year before 03/15/2004, a total of almost 59 million UGMI shares had changed hands.
But in just the past 15 sessions, which is only about 6% of a full year, over 13 million shares have supposedly traded. Expressing this another way, the 13 million shares that have changed hands in the past 3 weeks amounted to almost one quarter of all the UGMI shares that changed hands in the previous 12 months!
Now if UGMI shares had closed last Friday at over 30 cents, Sparky wouldn't have a problem with all this recent volume. But in the absence of such a price spike, Sparky's got to think something very strange is going on!
And if there isn't anything strange going on here, then why has there been enough trading volume to cause almost a complete shareholder rotation; when no such complete rotation has happened?
Sparky thinks there's only one feasible explanation:
Excessive & Aggressive Shorting Of UGMI Shares!
Now when looking back at the past 3 weeks, one might rightfully ask, who the hell would short the stock of a company that is attracting heightened volume and is releasing promising news?
Sparky's answer: Someone, or some entity, that had far larger short positions to cover and worry about, like ones totalling somewhere between 4 and 6 million shares, ones established no doubt between October and December of 2003.
Look at a UGMI chart! Where else did all that volume come from last October, and again in December?
If Sparky's observation is correct, and he sure thinks it is, then an awful lot of garbage needs to be cleaned up here real fast.
Over the coming week, therefore, Sparky expects to see some significant short covering, added volume that present demand levels simply cannot accommodate without a sizable price spike.
Conclusion: UGMI Shares Will See At Least 25 Cents This Week!
Sincerely,
Sparky
