Sea 2 Sky Corporation (SSKY), China Career Builder Corp. (OTC:CCBX), and New Energy Technologies, Inc. (NENE) are all up big today, despite a lack of news. Here's the rest of the story.
When a company posts encouraging news and the stock moves higher, it's not hard to figure out why. Today though, Sea 2 Sky Corporation (SSKY), China Career Builder Corp. (OTC:CCBX), and New Energy Technologies, Inc. (NENE) are all up quite a bit despite a distinct lack of news. What's going on behind the scenes with these OTC stocks?
Sea 2 Sky Corporation (SSKY.OB) shares are up 66.6% today (to $0.20) even though the last peep we heard out of the company was a 10Q filing from last week. The results were about what one would expect from a development-stage bio-energy company - no revenues, but plenty of expenses. None of it would prompt this kind of interest though, especially a week later.
So what could have spurred the sudden buying? Sea 2 Sky has stated they expect to begin operating (bearing revenue) in late 2009 as a pellet biomass supplier. Though it's not 'late in the year' yet, it's not unreasonable to assume the company has solidified a key piece of its business plan. In fact, a news leak appears to be the only viable explanation... even the message boards aren't terribly interested in this one (yet).
Sea 2 Sky Corporation states the wood pellet market is worth more than $500,000,000 annually.
China Career Builder Corp. (CCBX.PK) is up 21% today (to $0.45), but hasn't posted any high-impact news in weeks.
What gives for the Hong Kong-based human resource outsourcing service? A look at the stocks in the HR group as a whole will tell you there's an industry-based reason; the S&P 1500 Human Resources and Employment Services Index is one of today's brightest stars, up 6.2%. All these stocks are prodding one another higher.
The odd part is that these companies are mostly rallying despite rather bad earning results from Manpower and Dice Holdings today.
So why are any of these stocks rising top begin with? The general consensus is that this morning's slight uptick in jobless claims bodes well for HR and outsourcing companies. The irony is that Manpower and Dice (as well as Navigant and Robert Half) have all verified - with results - that the recession has been more harmful than helpful. If joblessness and the recession worsen, these companies are actually apt to do worse. So, the logic today is backwards; it may be a profit-taking opportunity.
New Energy Technologies, Inc. (NENE.OB) shares are higher by 21.5% today (to $1.42) even though they company hasn't posted any news in a couple of days. And, even that news wasn't inspiring - New Energy Technologies engineers have completed development of the Company's newest MotionPower(tm) prototype for generating electricity from the movement of cars and light trucks. Field tests will begin at a New York Burger King. Between the delay and the lack of significance though, that's not likely what's going on here today.
No, unfortunately in New Energy Technologies' case, today's strength merely seems to be a continuation of the rally that began in March. Why unfortunate? Because today may also be what many traders call a blow-off top - the end of a rally that finalizes itself with one grand finale. Odds are good that amateurs are now trying to 'chase' recent share performance. Today's volume is also the highest it's been in months (another blow off top hint), which is augmented by the fact that shares are at multi-month highs.
Never say never, but when the euphoria takes over and puts reason in the back seat, many savvy traders start selling what amateur traders have just gotten around to buying.