Why ALK has been flagged for me

I have been watching ALK, from a TA perspective due to its recent price/volume action, and also due to the information contained in the quarterlies released in Jan. ALK has now been flagged due to the price and volume response that occurred on Friday 6th Feb. To give some background to this post, I have attached my read on both the weekly and daily charts. Personally I like to keep my charts simple, so that the noise created by the addition of too many indicators does not distract me. I do however, use a number of different indicators, depending on the movement of a stock, but mainly for posting purposes, I hope that by presenting my charts uncluttered, other members are prompted to look at them, then add their own take on what they are reading from their own charts and Fundamentals.....hope that this makes sense.

ALK Weekly with Volume

ALK Daily with Volume


Why I will be watching the price/volume action closely Monday and during this week, is attributable to the Gap Up from last Friday and a few other clues that I observed from the charts. Eventually a stock that is range bound will break to either side, and in this case it is Bullish for ALK at face value. Some of the main questions that have arisen as a result of this Gap Up for me is,  why did it happen, why did it Gap up to that price level, why was the volume traded around that price level nearly to 2.56 times greater than the 21day EMA? One plausible explanation for the Gap up on its own was that the Smart Money is Bullish ALK. This is a reasonable assumption given the last 4 weeks of trading activity and price gains. As ALK was range bound and being sold down once it approached/hit resistance, the only way for it to break to the upside, would be to attack it full frontal. By this I mean that traders whom purchased say late August 2014 onwards were stuck with the stock moving sidewards as it bounced backwards and forwards each time it hit either supply or demand i.e resistance or support. As the traders were locked into a position causing them to be frustrated, bored etc, these traders would sell when the price approached resistance. This in turn would send the price downwards. Assuming that there is some Smart Money around that wants in on ALK and wants the price to continue to rise once they own it, and also know that any floating supply has already been absorbed, they know that the only way to keep the price momentum going is to GAP it Up through resistance. By doing this, other holders become bullish ALK as they see the price rise resulting in demand exceeding supply (this includes those longer term holders whom have seen the share price drop over a long time.) As holders are hence Bullish post Gap up (and not wanting to part with their holdings), the share price is driven upwards as more and more buyers want in on the action, but they are forced to pay higher prices due to the lack of supply. From the week ending 16th Jan up until last Fridays close, ALK has moved just under 40%. Recent company reports and quarterlies have provided hope, and to me show significant upside for the stock. The money needed for the Rare Earths project is staggering however, so I am not sure how this one would play out. I am not that knowledgeable on the number crunching for Rare Earth Projects by any stretch of the imagination. I am however bullish from reading the companies last Quarterly Reports released to market 28.1.2015 and the AGM report market release 19.11.2015.
So......on the other side, the Bearish side.........there is the pump and dump (cant stand that term) but in any market it happens with regularity as stock is transferred from the strong holders to the less informed holders. There is also the apparent double or even triple top reversal on the daily that has now appeared as a result of the Gap up to that level...will that play out? Will there now be a rethink from current holders due to all of the negative news about market tops, Greece, commodity prices, falling AUD that has flooded recent media, etc etc etc.........See it all depends on your view in the end. That is the great thing about HotCopper. We all get the opportunity to have our say and then listen to what others are prepared to share. We then weigh it all up, and act in a certain way based on what we think on balance may be the future direction of the trend.
There has been a sustained accumulation of ALK over the last 4 weeks at least. That is fact. New holders prior to the gap up may have been ready to sell and move on, then again new holders may have had the crowd mentality and just sat and wait and hoped for an upside to eventually come. That move on Friday was pre-meditated imo. If you look at the course of sales, at 9:59:49 just before the market opened there were 9 individual transactions at that time, for a total of 157,400 shares traded @29c, total $45,646. Seems a little odd to me that 11 seconds prior to open, this transaction appeared though. Maybe there was nothing to it, or maybe it was all part of a pre-meditated plan to create an initial then overall picture for the rest of the day. Smart Money runs the market, and is all about robbing us jo- bloggs, and setting us up to make poor trading decisions. Market manipulation happens day after day in every market. Question is, what is really happening with ALK and how does not only Fridays Gap up but the entire last 4 weeks action, set the scene for this week. Well, as I am not holding at present, as I have been patiently waiting for a break to either side to happen, I am now locked into Alert mode. This means I will be looking potentially looking for another day of strength on Monday. Of note, Thursday (the previous day to Fridays Gap up day) was a solid day one for ALK, with the stock up 3.77% on above average volume.
Summary: For me personally, I like the company, its tenements, its holdings, its capital position etc and am cautiously Bullish ALK. Whilst I would have preferred to enter at lower levels, I was already fully capped at that time. With some freed up capital, I am looking hard at ALK as a long. Yes it will be interesting to see what happens come Monday re the gap up......I will work on some numbers tomorrow (oops its nearly 2.11am) and I need to go to sleep.....um will work on some numbers later today and hit the charts for entry if follow through strength is shown.

PS please do not come back and tell me that all gaps get filled......because just maybe, this gap up will not be filled for quite sometime......

Best Wishes to current holders and thanx for listening.....
Cheers
GF