What's Behind Highway Holdings' High Volume Surge?

Jan. 4.07 | About: Highway Holdings (HIHO)

Most days in December, Highway Holdings (NASDAQ:HIHO) traded under 10,000 shares. Yesterday: 1.921 MILLION! That's more than it traded in the previous three months combined, and is by far HIHO's highest volume day ever. For part of the day, shares were up over 50%.

The news behind this mega-volume surge? I have no idea. Nothing on the wires, EDGAR, or even the Bloomberg terminal. Nothing.

There are a few rumors swirling around. Most surround a huge contract that Highway Holdings will announce within a week (Chrysler, etc.). Could be, but there are reasons to be skeptical:

  • Most high volume surges are apparent from the open, but yesterday HIHO opened normally and did not gain price or volume traction until 15-20 minutes into the trading day. Note that the Chinese business day was long over by this time.
  • HIHO has a history of surging in the first few trading days of the year, then retreating.
  • Chinese markets were closed for a holiday. It is certainly possible, but perhaps unlikely, that HIHO, was closing a huge deal during the holiday.
  • We should find out the cause in the coming days, but I decided not to wait. When I saw shares trading above $6 this morning I put in a sell order, which was filled at $6.25. I still like Highway Holdings, and will try to put on a position again if it retreats close to $4.

    HIHO 1-yr chart

    Disclosure: Author has no position in HIHO.