Smartheat Inc (HEAT + 1.50 or +13.65% to $12.49) matched its best ever close to the penny, and volume was almost 4 times average behind its big gain. It ended near the middle of its intra-day range after reaching a new all-time high, closing the session just under its pivot point.  In today's mid-day report it was highlighted in yellow and noted when technically rising from a "double bottom" base pattern (read here). The second consecutive big gain on heavy volume helped it blast further above its 50-day moving average line.  The action could be a sign it is encountering resistance as it tries to move into new high ground. To convincingly clinch a technical buy signal one would like to see more definitive proof of institutional buying demand.  Pyramiding into the stock might allow careful investors to accumulate shares methodically without paying more than the $13.24 "max buy" price, which is 5% above its $12.61 pivot point.

As is proper for a double bottom base, the consolidation took place over a period of at least an 8 week span, and the second low undercut the first low.  The lower low is the crucial "shakeout" during which weaker hands decide to unload their shares, helping exhaust selling pressure.  That kind of price action makes it an ideal set-up for a more powerful breakout, but a buy signal should be confirmed by a gain with at least +50% above average volume and a solid close above a stock's pivot point. Note that on 9/18/09 it completed an additional share offering. There is limited history for this small Chinese firm in the Pollution Control - Equipment group, however its reported annual earnings (A criteria) history has been strong. The 3 latest quarters show sales revenues and earnings increases well above the +25% guideline, satisfying the C criteria.