To tell the truth, I'm not the least bit surprised that I'm chiming in on Venaxis Inc. (NASDAQ:APPY) today. It was a stock I dissected just two days ago (on Tuesday - here's that chat), pointing out how all the telltale signs of bullishness were brewing. Sure enough, APPY popped on Wednesday, and as a result has gone from a mere potential big mover to an actual mover.
Just to get everyone up to speed, APPY had been getting squeezed into a narrower and narrower trading range. In fact, that range had been whittled down to a mere ten cents, which just isn't enough room for a $1.40 stock like Venaxis Inc. to comfortably move around in. Something had to give soon, and given that the market had been squeezing in on shares for a little over a month, there's was a lot of pent-up energy to unleash.
Well, as of yesterday, Venaxis has broken out of that narrowing range - bullishly - and at the same time has broken above the 100-day moving average line (gray), which had been a nagging resistance area since late July.
That 'unleashing' action alone was enough for me to go ahead and fall in love with APPY, but today's action seals the deal. Today, shares are following through, up five cents (+3.0%) so far, telling us yesterday's surge wasn't just a little volatility. Take a look.
Bolstering the bullish argument is the fact that volume poured into Venaxis Inc. shares on Wednesday. The 1.8 million shares that traded hands - most of it buying volume - yesterday was the most interest we'd seen in the stock in weeks, and in light of the multi-week buildup we've seen [APPY has been moving higher for months, in fits and starts] since June, it's the culmination of a lot of bullish undertows that have been working hard to finally converge at this point. Now that they're all converged, Venaxis is ready to go from good to great.
As for a target, well, this isn't necessarily a long-term call on APPY. Though we should get some good traction now that the taut slingshot has been released, the rally's apt to slow down, if not stop, around $2.25. That was a turbulent area earlier in the year. The $3.00 mark was a firm ceiling in the last half of last year if shares do manage to break past $2.25. Still, that's a pretty good move, and worth a shot.
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