Towerstream Corporation (TWER) Sets Up for Vicious Bounce?

TWER is a stock that’s been under heavy distribution lately even as the company just recently announced a 70% increase over new building additions in Q2, bringing its total On-Net buildings to 335 at the end of Q3.

This is potentially big news and is helping to foster a sense of a potential bounce in the works.

The chart shows 5% tacked on to share pricing for the name in the past week, a bounce that has taken root amid largely bearish action over the larger time frame. However, TWER has a history of dramatic rallies.

In addition, the company has registered increased average transaction volume recently, with the past month seeing a bit less than 140% above its longer run average levels. Traders should note this as important due to the very limited float size in the stock (about 3.6M shares).

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As savvy traders are well aware, a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders.

TWER frames itself as a company that provides fixed wireless broadband services and delivers access over a wireless network transmitting over regulated and unregulated radio spectrum to commercial customers in the United States.

Its wireless broadband service supports bandwidth on demand, wireless redundancy, virtual private networks, disaster recovery, bundled data, and video services. The company offers services to business customers in New York City, Boston, Chicago, Los Angeles, San Francisco, Seattle, Miami, Dallas-Fort Worth, Houston, Philadelphia, Las Vegas-Reno, and Providence-Newport.

It offers its services through direct sales force. Towerstream Corporation was founded in 1999 and is headquartered in Middletown, Rhode Island.

TWER has a significant war chest ($9.98M) of cash on the books, in a pool of total assets greater than $36M, which stands against an appreciable load ($36.06M) of total accumulated debt. The balance sheet isn’t in great shape, which raises the prospect of dilution. That’s been weighing on shares of late, but recent technical action suggests a strong chance at some kind of bounce traction here as the new week kicks into gear.

Put TWER on your radar.

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