The second half of Thursdays trading session was truly interesting for investors watching Eco2 Plastics (OTCBB: EOPI, EOPI message board). The stock price simply shot up 100% amid the session and this move most probably triggered traders to cover their short positions.
No news has surfaced to explain the move in any other fashion and so the best guess is to stick with technical triggers. It was a long drive down for the price, and meantime many trending indicators had become to show the inevitable bottom approaching.
The strongest forecast could be derived from the MACD which had been opposing the price movement direction for over a month. ADX has been showing some convergence and crossed upon the breakup. Volume had been rising for the past two days but with negative price movement this didn't cause too much of concern.
What should be expected to happen next is some price contraction. Though the move ended with high volume and there might be some space for follow through, usually such large moves are followed by at least 30% correction.
If more investors would decide to cover their position though, the stock might actually climb on Friday as well, but such assumption is a quite speculative one.
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