ECIT Stock Heating Up
Ecoland International (ECIT:OB) has been a dead penny stock up until the last 7 sessions or so. However, the volume has really picked up since ECIT issued an acquistion based PR. Although the news was somewhat fluffy, ECIT announced on 10/5/11 that they acquired D&R Technology, and subsequent promos have put this penny stock in play.
Despite the current interest in this hot penny stock, ECIT still has some work to do on a technical basis. Shares are currently trading below the 50 and 200 DMA’s that are 37 and 31 cents respectively.
Fundamentally speaking ECIT might seem like a little bit of a reach, even for speculative investors. In the past, ECIT has focused on packaging and processing bat guano, which in laymen’s term is feces and urine. The idea is extremely exotic considering the economic conditions, especially since the guano was intended to be used in organic fertilizer.
Ask yourself this. Is bat guano based organic fertilizer a neccessity to the masses ? Probably not, however if the promotion continues, then on a pure momentum basis, ECIT could easily test the 200 DMA of 31 cents. But it gets better, D&R Technology which seems to be the flagship of the ECIT enterprise, and will consequently assume management control is in the automotive industry.
ECIT Stock Has Investors Excited
D&R Technology is in the business of automotive tube processing and claims that it is a pioneer in the mentioned industry.
Just remember that before the merger, Ecoland International (ECIT:OB) had less than 6k in cash and did roughly 13k in revenues before the acquisition.
Has the former management team gone batty ? The drastic change of ECIT‘s future vision is obvious. Can the new management team make it work ?
These are questions that some holders of ECIT stock might want answered, but the issue of the merger is probably irrelevant. Only a fool would expect ECIT to turn into a blue chip automotive related stock or even a minor NASDAQ name for that matter.
This is why we always try to point out that penny stocks are news driven, and offer opportunities because of their volatile nature. So take ECIT at face value and view it as a short term trading vehicle.
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