Bridgeline Digital (BLIN) Stock Is Flying: Here’s Why

Bridgeline Digital Inc (NASDAQ: BLIN) is headed up in a big way in the market this morning, gaining well over 30% before the bell. However, if you’re looking for company specific news, you’ll be hard-pressed to find anything that’s likely to move the needle. 

So, what’s going on?

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Why BLIN Stock Is Headed Up

With no company specific news released, anything mentioned below is speculation. Nonetheless, here’s what I believe is going on:

All told, it looks like social retail traders are taking hold of this ultra-low float stock. At the moment, there are just over 5 million shares of the stock outstanding. Because the market is a system of supply and demand, traders often look for low float stocks as potential targets for extreme movement in the upward direction. 

After all, a low float means that there’s a limited supply of shares on the market. As a result, if demand picks up for those shares, the supply simply won’t be able to keep up, resulting in dramatic gains. 

Recently, there’s been quite a bit of chatter on message boards surrounding the possibilities brought to the table by an investment in BLIN. 

While there’s not a ton of short interest on the stock, just before the run, it was trading at a low for the year. This low has been considered to be support by many, and when the masses see a stock near support, they tend to start buying shares under the expectations of upward movement. 

These expectations become self-fulfilling prophecies. As traders start to purchase shares, the scales of supply and demand are tipped, resulting in gains. Of course, as other traders see the upward movement, they begin to dive into the opportunity, resulting in even more upward movement. 

If the float is small enough, and in this case it is, all the buying results in a dramatic rise for the top, which is exactly what we’re seeing out of BLIN stock this morning. 

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Final Thoughts

With no news causing the upward movement, what we’re seeing today, and what we’ve seen recently, is a flood of traders getting involved in the stock. As this continues, the sky’s the limit as to how high the stock can go, making BLIN stock one to watch closely. 

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