OLAB Short Squeeze

Michael wrote in about a possible OLAB short squeeze. Here is his analysis (copied/pasted from his contact).

"I am letting you know that this time I am writing about OLAB (Nasdaq), which has a float of only 953,000 shares.  Out of those, 552,000 (about 55%) have been shorted as of last reporting date in mid-April.  Here is a direct link to Bloomberg.

Today (May 16, 2006) around 3:45pm, OLAB issued a 10-Q filing that basically stated the following:

“Co reports Q1 net income of $333,895, compared to a net loss of $15,652 in 1Q05 (a difference of $349,547). Revs rose 26% YoY to $4.5 mln. The increase in net income was principally the result of the higher sales as well as improvements in gross margin. As a result of unexpected delays in gathering the data necessary to finalize the financial statements and accompanying notes of the Registrant's Form 10-QSB, the report on Form 10-QSB could not be timely filed without unreasonable effort or expense. The Registrant believes that the Form 10-QSB will be filed within the extension period.” You can see the complete filing.

I strongly believe that this “positive” earnings news will CRUSH the shorts!   The stock ran-up from about 4.20 to as high as 5.34 during the last 15 minutes of trading.  It closed for the day at 5.08.

The stock has been oversold and has no resistance to the upside until $6.25 or so.  If it can jump above that price, the next resistance level should be around $7 and then 7.75. The stochastics just started to climb.  The RSI is only 50 and the MACD is not too far from turning positive. Look at the chart yourself.

I urge you to please do your own due diligence, but based on the news, I have initiated a long position in OLAB right before the market close today."