In a perfect world, a stock's price is merely a reflection of a predictable combination of a company's history and forward-looking prospects. We don't live - or trade - in a perfect world though. In the real world, a chart not only tells a story, but illustrates traders' changing opinion of a stock. The good news is, traders move, thing, buy, and sell in fairly predictable patterns, and when you see certain hints fall in place, you can make a very good trade. Enter Authentidate Holding Corp. (NASDAQ:ADAT) and Greenhunter Resources Inc. (NYSEMKT:GRH). Both GRH as well as ADAT have taken on a bullish shape as of today, and both are apt to be at much higher levels in the foreseeable future.
For Greenhunter Resources, that clue is the fact that shares have finally broken past a long-nagging resistance line... two of them, actually. It's also left behind a trail of higher lows to lead the stock up and above those former resistance lines. Throw in the fact that GRH has been making bullish progress on persistently higher-than-average volume since the middle of the year, and it becomes clear this effort is something of a freight train you don't want to get in the way of.
GRH provides support services to the fracking industry, primarily in the Marcellus, Eagle Ford and Bakken shale areas. It was something of a rocky start, but 2013 has been a pivotal year for the company. Greenhunter Resources had a decent 2012, putting up sales of $17 million. Through the first three quarters of this year, however, the company's driven $28 million in sales. It IS up and running. Better still - and this may be the reason Greenhunter Resources shares are on the verge of a monster-sized breakout - that revenue growth has brought the company to the brink of profitability. A little more revenue could go a long way, and draw a huge buying crowd once it happens.
As for Authentidate Holding Corp., you have to take a step back and look at a long-term weekly chart of the stock to see just how important today's pop was. But, it's worth the trouble (though we've gone to the trouble for you below). The move to a high of $1.79 has carried ADAT above what had been a major ceiling at $1.65 in late 2011 and early 2012. Although it's very likely Authentidate Holding shares are going to pull back from their near-term overbought condition, that should be a short-term lull. The buyers have tipped their hand (the volume behind the buy-in is huge), and now that the cat's out of the bag, this stock's apt to keep rolling.
ADAT is the publisher of healthcare-management software and web-based services. The stock's 17% pop today wasn't prompted by any new from, or even about, the company. That could be a little intimidating. In this case though, we have to assume that "somebody big knows something" about what's in the cards for Authentidate Holding. And if it's really just a big or institutional investor deciding now's the time to get in ADAT, that's still an encouraging sign.
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