XpresSpa Group Inc (XSPA)

[tobinator00]

$3.50 and $3.75 key price points

Thus far, the trade in Vringo has been most encouraging. A traditional price spike this year would have consisted of the stock presently in the low $3.20 area. Profit takers, stale longs and Pavlovian shorts are hammering the bid, yet the price has been relatively firm.

I believe the longer the price stays above $3.30 the more likely for a powerful push higher in price. My reasoning is that both longs and shorts are treating Friday's price spike as if it will quickly fail and fall to the low $3's. By maintaining this price area, just for a few days, particularly the shorts will begin to get nervous because the stale longs will have exited and they will have pounded the bid, yet it did not fall as expected.

http://stockcharts.com/h-sc/ui?s=VRNG&p=W&yr=1&mn=0&dy=0&id=p32997353223&listNum=3&a=310237835

My guess is a close over $3.50 will send a clear message that strong accumulation is occurring. Whether it is someone in the "know" or institutions starting or adding to their positions is irrelevant. A close over $3.50 will be the first since early December. A close over $3.50 will then start a game of chicken between the shorts on who covers first, covers the best. Those who don't could see themselves trying to cover at $4.

A close over $3.75 will clearly be extraordinary for this stock, particularly on no news, since Vringo has not closed over there since November, when sentiment in the stock was tremendously more bullish than today.

Baby steps, baby steps. My preference is for Vringo to close in the $3.40 range today followed by an upward grinding this week. After all, the more stale longs that are removed and increased short positions at this price level will just make the stock so much stronger going forward. Someone out there is gobbling up this stock on the long side at this price level. My guess they are not going to flip the stock for a quick buck but are institutional interests accumulating longer term positions.