$EONC: Watch Out for the Short
December 17th, 2009 at 9:57 am Posted by
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.
