USGT Shows Strength in Face of Short-Term Profit-Taking
USA Graphite (USGT) has been very heavily traded this morning with nearly 1 million shares changing hands in the first half hour of trading.
Today is New Year's Eve and markets will be closed for the New Year's Day holiday tomorrow. Typically, short-term traders want to flatten their positions before a market holiday to lock in profits and to avoid risk while the market is closed.
That is particularly true for USGT on this New Year's Eve given last week's spectacular 22.2% rally and the uncertainty facing the markets because of the fiscal cliff. Momentum traders are taking profits and will be looking to get back in on January 2nd after the holiday.
While short-term, momentum traders are driving the price action this morning, their profit-taking has been met by steady buying demand from investors who understand the potential of USGT's graphite properties and are looking to get USGT shares at a good price.
As noted above, volume is very heavy, with nearly 1 million shares traded in the first half hour. Although USGT's price is off slightly, that means that nearly 1 million shares were bought by investors who want to own USGT for the longer term. What we are seeing is nearly 1 million USGT shares shifting from weak, short-term, momentum trading hands into strong, longer-term investor hands.
This is very positive for future price appreciation. The investors buying USGT today are buying because they believe, as we do, that the prices is headed for $1.00, $2.00 and higher as management expands its exploration efforts and seeks new graphite properties that will allow the company to conduct its exploration operations with maximum efficiency.
The profit-taking we are seeing this morning from the short-term, momentum players has everything to do with tomorrow's market holiday and concern over the fiscal cliff and nothing whatsoever to do with the outlook for USGT.
Don't miss out on this last chance to get USGT for less than $0.80! The short-term, momentum players will be back and January 2. Only this time, they will be buying.
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