$EONC: Watch Out for the Short
December 17th, 2009 at 9:57 am Posted by The Dean
The Dean would be naive if he denied the fact that hyped up, promoted or, otherwise, overbought stocks will inevitably fall. In fact, The Dean liked seeing a comment on Monday’s Honor Roll that one of his students planned to short some of The Dean’s bloated stocks of the day.
eOn Communications Corporation (NASDAQ: EONC) provides communications solutions to school systems, multi-tenant buildings, professional offices, distribution facilities and retail stores in the United States and internationally.
Yesterday, $EONC hit its 52-week high of $4.20, climbing as much as 61% since last week. $EONC caught The Dean’s attention because the stock traded 1,862,800 shares—17 times its 3 month average—making a run up 35% before closing 9.6% in the green on the day.
At midday, TheStreet.com issued a “volume play” alert for $EONC and the volume continued to climb throughout the remainder of the trading day. And, this morning, StockPreacher.com issued an investment report featuring $EONC, discussing the company’s strong financials and 154% year-over-year increase.
Back in November, BeaconEquity.com released an investment report on the company, after $EONC traded 2,638,500 shares and gained 73%. By the following Tuesday, $EONC fell by more than 24% on profit taking and considerably low volume.
With infamous stock shorters, like Mr. Timothy Sykes, out there, The Dean believes $EONC will follow a similar pattern of shrinking volume and decreasing share volume. This brings The Dean to call for a shorting lookout on $EONC.
