10/12/2021
$CEI
Volume leader on the NYSE. Many think this is a bullish story. They ignore the fundamentals.
When you look at the volatility profile of this stock you will see a massive rise. That is all the movement up to the green line on this chart. The volatility continues to fall off because the buying is tapered. Let's walk through the candles.
1: Engulfing red candle. The run is over.
2: Closes below the preceding candle. Sign of buyer exhaustion.
3. Re-test of the sell wall. Further confirmation to run with profits.
4. This stock has 299% short interest. The liquidity is gone. There is more sellers than buyers by a mile. Sellers needed two daily candles to exit their positions.
5. Participants with borrowed shares are required to buy back their short shares to close out the position, this causes ultra high volume and a green candle. Retailers foolishly think this is bullish. It's not. Retailers climb back into this trade.
6. Participants that close out their position on #5 can re-enter bearish positions to drive price back under the EMA line.
What will happen next? It's all up to the retailers. They can drive the price higher but it's very difficult. They need to close this candle above the EMA. It's important to note the green daily candles closed above the previous line of resistance (green line) and all candles closing under the current line of resistance (red line). Pay attention to closing candles with the volume.
I'm on the sidelines watching for now.
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