When shares are in short supply, you see bigger price fluctuations because the market makers are trying to either take out stop losses they can see on the system or encourage selling from those who are one or two tick flippers.
What happens is that eventually more and more folks who are holding for much larger returns eventually have pretty well bought up most of the available shares in the float and the stock then runs as market makers know that they have to raise the price to encourage folks to sell.
When you see good news in a good company with a small float like UHLN, first you see a big spike in the price, some manage to sell at the top and then wait to see how low the rebound comes in at. Then they buy again.
Eventually as all those who are flipping get taken out, the stock starts to move up again. The reasons can be as follows. The company might be getting near to the date of a stated catalyst - closing of the reverse merger, or quite simply those holding for higher gains lock up their shares for sale at much higher levels.
However, on those days look at the price fluctuations. You will see the price stabilise in a range. Eventually those price fluctuations get smaller and smaller as the day goes on and you can see a simple bull pennant flag forming. Once the point of the flag forms the stock carry's on moving up.
This stock is moving on expectation of huge news coming out very soon. It has not, in my view found/settled into its new trading range yet.
Considering the recent Facebook update I think that's a very clear signal that the deal is still very much on. Therefore the price will rise exponentially on expectation of the arrival of that news.
Lots of folks bought in higher and they have averaged down these last few days. In my view this will make a sustained move upwards now on expectation of the closing of the deal.
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