Otelco, Inc. (NASDAQ:OTEL) Extends the Rally to New Yearly High

[[tagnumber 0]]After trading in a channel for months, Otelco, Inc. (NASDAQ:OTEL) finally broke out at the beginning of August. The rally extends even further this month as the company filed its quarterly report and the share price reached another new 52–week high on Friday. Though the chart still looks bullish, the company has not yet announced any news concerning its huge debt that is due soon.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]OTEL gained 6.13% in the last trading session and closed the market at $7.10 on Friday. That represents a nearly 28% gain since the start of the short–term uptrend at the beginning of the month, and as trading volume grew even further it looks like the stock could climb a little higher for another session before there is a downward correction. Technical indicators already give signals for a coming pullback.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]OTEL operates rural local exchange carriers and is the sole wireline telephone services provider for three of the local communities it serves. The company claims to have a broad range of telecommunication, data and entertainment services, yet its financial condition looks disastrous and it need urgently cash to cover its operations. According to the second quarter report, OTEL has a huge working capital deficit as the remaining balance of its outstanding notes payable was moved to the current liabilities.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 12]][[tagnumber 1]] [[tagnumber 0]]The debt is due in April 2016, however, the company‘s managements says in the report that it will have to seek for refinancing opportunities as it seems impossible to repay principal and interest solely from operations. OTEL has positive operating cashflow and a small positive net profit, yet total revenues are declining which does not seem promising on the long–run, and given the lack of liquidity to invest in the business.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]It looks like the company will have to release any news related to the repayment of its over $105 million debt, or the share price could tumble back into the lower trading range.[[tagnumber 1]] [[tagnumber 20]] [[tagnumber 1]]