SPKL has far outstipped my early expectations with Friday’s breathtaking breakout to the $1.21 level, with a high trade on the day of $1.24.
Are you wondering buy, sell, or hold? If you been reading the OTC Journal for any length of time, you probably already know what I am going to say.
Trading 101- Class- what do we do when stocks we are following make big, spiky, high volume runs? Heres the chart of SPKL:
As you can see, Friday was a huge spike. The answer to buy, sell, or hold? Let’s start with what you don’t do. While this stock may power higher for a day or two more, you don’t buy now. It is going to cool off. The announcement of the addition in one store in Florida is not a game changer- there will be many such announcements in the future.
Hold or Sell? That depends on you and your goals. If you are looking to make some real money off this idea over a longer term, you should probably just hold on, be happy with what you have, and wait for a pullback and some quieter trading to accumulate. I am looking for much higher than $1.20 over the course of time. If you have a traders mentality, or want to try to play the trading game and sell now, hoping you can buy it back cheaper, there’s nothing wrong with that. I might sell a few shares as well next week.
If you are wondering why the stock is so hot- here’s a guess. SPKL starting trading some volume this past Monday. When market makers see volume materialize on a relatively thinly traded stock, they assume investors will get tired and they start shorting. Then they cover at a lower price and make a few cents when seller materialize.
As more investors learned the SPKL story, the buying just kept flowing in. I believe there was a mini short squeeze on Friday. Stocks trade like that when someone has to buy, not wants to buy.
In summary, if you want to establish or add to a position, wait. If you want to make a partial sale, not a bad idea. If you want to stick with this one for the long term, be prepared for the fact that it might pull back a little.
Comments and questions are welcome.