It could be anticipation of much improved first quarter results, but that is a little way off still, probably around mid-May. As mentioned in our review of Integrated Silicon in the April Contra, the $10 mark is important, because that level wins more attention from pension funds and other institutions. In the past few years we´ve noticed an increase of software packages that create trade signals based on technical analysis. Perhaps these programs are persuading some people to jump on the bandwagon.

A more pedestrian explanation is that this is a good old short squeeze. Those with a predilection for slumming it may have noticed that Wabash is colourfully and consistently bashed on the Yahoo message board. As a source of information, this venue presents lots of noise, but the smokescreen can still point to fire.

At the beginning of 2010, short interest was 481,193 shares. This moved up steadily, then accelerated sharply in tandem with the surging stock price. By the end of March short interest had climbed to over 1.8 million shares. With the amplitude of the run up, the margin calls on these short positions must be horrendous. Given how this stock can jump if another substantial order is announced, it would not be surprising if shorts are electing to take their beating now, rather than risk worse later.

The top end of the target range is $14, still a fair distance away. With a tidy profit salted away, the intention is to hold off with further sales until the shape of the turnaround rests on solid evidence rather than pure conjecture.