USGT Rebounds from Early Profit-Taking
USGT
saw some short-term profit-taking in heavy volume of more than 1 million shares during the first hour of trading this morning as momentum traders squared their positions ahead of tomorrow's New Year's Day holiday.
Despite some aggressive selling by short-term traders, longer-term investors, convinced of the potential for USA Graphite's graphite properties, easily absorbed that selling and pushed the shares higher in light volume during the afternoon.
Although the price briefly touched the $0.715 level at the height of the selling pressure, once the sellers were exhausted, USGT traded in the range of $0.78 to $0.79 for most of the day.
On the daily chart, the uptrend in USGT is still intact, even though the price did not hit a new high during today's trading. Investors should consider today's price action "the pause that refreshes." The fact that there were more than enough buyers to offset today's short-term profit-taking and then some should boost investors' confidence in the solidity of this rally.
What we were seeing is a large number of shares—well over 1 million—moving from weak hands into strong hands. Investors, the strong hands who understand and appreciate the USGT graphite story, are not going to be quick to sell their shares. They are looking for the rally to continue to $1.00, $2.00 or even higher.
The key point to consider is that, as this rally continues, the short-term momentum players will be back but this time as buyers, not sellers. And there will be more shares in the strong hands of investors which means there will be fewer shares to satisfy the momentum traders' buying. That is when the price of USGT will really take off!
On Friday, USGT management said that they are aggressively pursuing new graphite properties near their existing leases in order to efficiently add to the size of their potential graphite resource.
We know how fast USGT can move. It took only a few days for the company to go from announcing a letter of intent to lease the Gordon Creek property to actually closing the deal. On that basis, we can expect more acquisition announcements from USGT soon.
Are you in yet? The chart looks great, the shares have proven to be resilient in the face of concerted selling pressure, the fundamentals are in place, graphite and graphene science is advancing almost daily and management is aggressively expanding the company's exploration properties. Don't hesitate. Start the new year right. Get in on USGT while it is still selling for less than $1.00.
Disclaimer: http://mypic.us/photos/20121227135664521181232.jpg
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