Well, I hate to say it, but technically CPNE is a complete disaster, and this week’s action has swept away any vestiges of hope for a support level to appear. In short, I am now convinced it is impossible to call the bottom on this stock. In my view, this stock will continue to go down until it starts going up- and goes up, closing at higher levels, for a week or two in a row.
Here’s today’s chart:
The last level of technical resistance was $1.44. This is a pretty long term chart, measuring the performance of the stock week by week- not day by day.
The stock has fallen below the very long term weekly 61.8% retracement level, which means there is no end in sight to the fall off. Had the stock held in this area, it could have been a great inflection point for turning back up.
Fundamentally, I have no indication the company is not moving along nicely. Technically, I will no longer even attempt to guess where the bottom is.
If you have recently bought somewhere in here, I would just go ahead and sell it for a small loss, and wait for the bottom.
If you are holding it from higher levels, you have to decide if you want to hold your nose through the technical stench, and hope the company hasn’t fallen on undisclosed hard times, or just go ahead and sell. It’s your money, so the choice is yours. As I have stated, I have no indication the company is doing poorly.
If you’re looking for a culprit to explain the dramatic drop in the stock, a good guess is eFund. There are two main sellers in the recent registration statement- fund manager Jeffrey Feinberg is registering about 2 mllion shares, and eFund is registering about 7 million. Here’s the big difference- Feinberg has a cost basis of $1.90, eFund has a cost basically zero- they just helped put the company together over three years ago. My guess, eFund has figured out a way to pre-sell against their registered shares.
This is just a guess, but they are the only ones out there with enough size to hurt the market this badly and a low enough cost basis to make it pay off for them. Until there are some SEC filings from them, we won’t know.
In summary- I would not open new positions at this time until it is clear the stock has bottomed out. You have to decide what to do with your current position- the choice is yours. Only hold it if you are long term and aren’t going to watch the quote every day. I have no indication there is anything wrong at the company.
Sad, after this stock was so good to us for nine months, but that’s the stock market. I could have published a note saying the stock was even a better buy at these levels, but you read this content because I tell it like it is.
Comments, questions, and general complaints are welcome as always.