I don't know anything about AGY, what they do (or propose to do),
At this point it just looks like a breakout,
At this point, we don't know at this stage if it is just a form of pump and dump, or a pump for a cap raise, or if it is actually the real deal potentially sustainable breakout.
Firstly the initial big rise has an outside breakaway gap (I think that is what it is called), which have a fill rate around 60% or so (and the fill rate is even less if followed by an outside continuation gap in the future) , and if that is correct, it has a much lower probability of being filled, compared to a more common inside gap (which have fill rates up to 98%).
Secondly, that first bar has gapped up on high volume.....absorption volume (which is an attempt to absorb the increased supply which will normally be drawn out when price rises sharply).
Then the next bar sees the range narrow considerably (especially when compared to the true range of the initial bar, which I have shown on my chart - below), and that reduced spread occurred on volume which is also quite high........increased supply (selling) is being drawn out.
So in response to the increased supply, the third bar pulls back, and volume drops considerably, which suggests that supply (selling) is also much lower.
Then in response to the lower volume downbar, price attempts to accelerate higher again, with another gap up from the previous close. Volume was a little lower on this bar than the two other up bars, which suggests that while supply is still present, it may be easing when compared to the initial two upbars, and the close was the highest of this initial rise.......this is quite promising......
And finally today, price pulled back again (caused by nervous nellies ??), this time with a wider spread, but with lower volume, which doesn't make a lot of sense, but that sort of thing can happen when there are a lot of retailers involved (....slightly random or not well thought out selling....).
I should also point out that when price and volume does not make sense, you should consider it might be a distribution of some type, but perhaps on this bar alone, especially if there is a large retail involvement, it could be just watched, and this point be kept in mind for now.
So at this point we can't be sure what the real intent behind the rise in price is,
But as usual, if it is the real thing, then if the supply being drawn out does not become overwhelming then price will continue (grinding ??) higher. And if the supply does begin to overwhelm, or it becomes too expensive to absorb at this level, then expect price to pull back more substantially, or shakeout, in an attempt to remove the supply and clear a path higher.
It is more difficult at this stage to know if it is a pump of some kind (and dump, or CR), however if the stock is well capitalised, then depending on your risk profile, you need to choose a level where "if breached, you don't want to be in this trade anymore" (or are happy to sell for now, with the intention of buying back later). Generally it will be just below the low of the initial downbar (6.9cps), or the low of the gap up bar (6.5cps), or the low including the true range of the gap up bar (5.7cps).....but it could be at any level you choose, depending on where your entry was, and what your overall risk profile is.
