In a classic merger spec play, Coastal Capital Acquisition Corp. (OTC: CCAJ) had a major runup from August 31st to September 1st after their CE was removed. Traders who got in early made major gains in the 332% runup. But this CE situation held particular benefits for traders outside the US such as Canada where the Caveat Emptor is not in effect.

Catalysts

Early investors patiently waited for CCAJ’s resurrection after 12 years of inactivity. The considerable investment made by the company’s management to make CCAJ current is a positive sign for its merger or acquisition potential. Now this investment has become a testament to the shell’s mission to identify and negotiate with merger and acquisition targets which have yet to be disclosed.

In the mean time, investors are eagerly speculating about the possible candidates for this company with some pointing to the potential for a biotech merger. This is likely due to the addition of Dr. Barry A. Ginsberg as a consultant. Ginsberg is an advisor to executives using his expertise in the pharmaceuticals and medical-products sector. He has also acted as a consultant and strategist for healthcare companies. Jonathon D. Leinwand was also brought on as CCAJ’s legal counsel and has acted as outside counsel on behalf companies traded on the OTC Markets, NASDAQ, and Stock Exchange. Currently Leinwand is consulting for a variety of other OTC companies.

While CCAJ’s management has remained silent throughout the process so far, the stock could easily be set off by an update from its management considering its relatively low float of 593 million. Investors have been quick to compare CCAJ’s successful CE play to International Endeavors Corp (OTC: IDVV). IDVV dropped filings in June and August and has a reported float of 152 million. The acquisition company also has a real estate portfolio and has been working since January to remove its CE.

Media Sentiment

@MattRiv2 – reliably the most positive FinTwit influencer in the OTC community – has brought a lot of attention to CCAJ’s special CE play in the days before its runup.

Technical Analysis

Accumulation has started flattening following the intense interest investors showed trying to get in on CCAJ after its CE was removed. RSI overshot on September 1st hitting 83.56 before its steep decline and rebound put RSI at 57.4 for today. The MACD is showing bearish movement with the stock declining sharply following yesterday’s crossover. But the stock is trading at $.0139 with a support at .0135 and resistance at .0148.

Should you Buy?

No doubt investors are taking a risk with CCAJ considering the lack of merger news. However, the stock has enough interest and a small enough float that investors could book additional profits from the stock after its impressive 332% runup – potentially hitting $.0199 again on merger news. But the pullback will likely be severe making this a cautious investment.

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