SavWatt USA Inc (SAVW)

[np3004]

I was expecting a breakout above the trendline and maybe a close in the high .004s or low .005s. Intraday we ran into the .007s, an increase of over 80% before pulling back at the end of the day as the day traders cashed out epic one day gains and settled for a 59% gain on the day.

Once it was clear that the downtrend was reversing on massive volume over the prior trendline the buying poured in. I have not seen a level 2 printing such massive buying at the ask in some time. It was a thing of beauty.

I believe we will continue to run over the course of the week. A red day is inevitable at some point but we did get some retrace at the close of the market. There will inevitably be some discussion about how we gapped up on the open and we will have to come back to fill it. Should that happen it would almost certainly be snapped up quickly. I’m not so sure that this window is going to close and we may just continue onward. Not every gap fills. While it is very common it is not a hard rule that it must. Especially on a technical breakout on volume.

Another interesting thing to note was watching market makers moving their far out offers on the ask out further. Most were in the .007s at the start of the day. We witnessed several MMs move their “sell points” to .01, then to .05 and some to .25. Also interesting amongst market maker action was watching LAMP sit on the bid for quite a period of time today accumulating the shares of flippers. You can bet LAMP was not buying up millions of shares on the bid to sell them lower.

While days like this are exciting, let’s not forget that the real reasons for considering this company are the products, press releases, potential contracts and news that may come out of their grand opening. As I said before, I believe it represents good risk/reward and has potential to make quite a run both short and long term.

The best is yet to come….

http://mattjohnsontrading.com/2011/07/11/savw-up-59/