Echo Automotive, Inc. (OTCMKTS:ECAU) Jumps Seemingly Out of Nowhere

The stock of Echo Automotive, Inc. (OTCMKTS:ECAU) was being traded quietly for quite a while, after the heat of February and March cooled off. Recently, however, it started to climb both in price and volume and it seems that the main reason for that was a press release from October 29 which sparked investor interest.

The press release was very optimistic, indeed, but we reckon that the discussion on investor forums, where a lot of people touted the stock also played its part in maintaining the upward run.

ECAU announced that the company is initiating a North American pre-sales for their EchoDrive^TM fuel efficiency system and an incentive program that promotes loyalty between the company and the customers that order first and this was enough to heat things up a bit.

This in term led the company stock to a 71% gain over 3 sessions and an increase in volume. Yesterday, as ECAU added another 13% to its value, it registered the highest amount of traded shares in more than 6 months.

The stock gapped up and opened at $0.50 per share and there was little movement. The ticker closed the session at its opening price with an estimated 578 thousand shares that switched hands, generating $302 thousand in dollar volume.

What concerns us the most is the fact that the actual sales of their product will commence in mid-2014. While some of you might say that this is not such a big deal, it could mean a correction in the stock’s direction in the coming sessions.

Another thing that troubles us is that the EchoDrive^TM system is only available for Ford E-Series vehicles. While ECAU is targeting businesses with big fleets that want to save up on gas, this limits their product’s market quite a lot.

In all cases be sure to do a lot of due diligence and weigh out the risks for yourself, because things can turn around pretty soon if we don’t see some more optimistic news.

Another company that had a decent gain yesterday was Globalstar, Inc. (OTCMKTS:GSAT), who finally made a bigger percentile movement with a 17% gain on a massive 15 million shares that helped generate $25.7 million in dollar volume. TheDirectory.com, Inc. (OTCMKTS:SEEK), was probably the biggest winner with a 52% gain in price and a high volume.