Spicy Pickle: Are We There Yet?

Anyone who has been reading my commentary on SPKL knows I have been suggesting avoiding the stock for a couple of weeks. I felt as if the stock had gotten a bit ahead of the company, and it would be prudent to wait for a pullback.

So- here’s the big question- what’s a good entry level to continue to accumulate this stock? I had the opportunity to watch some of the action in the stock today, and was very impressed with a technical reverse when it pulled back to the $1.43 level.

Looking at the chart, it is no surprise. Here’s why:

spkl14.gif

Here’s a chart measuring the entire monster move from $.56 to $2. So, as you can see from the chart, the $1.43 level was a nearly perfect 38.2% fibonacci retracement. If you jumped on the stock at that level, you made a great move as it appears so far.

If this level holds, it seems as if that was the opportunity. If the $1.40 or so level gives way, the $1.12 range would be heaven sent for those looking to jump in.

In the current market environment, these pullbacks are tending to be a bit shallower and short lived, so $1.43 might turn out to be our best opportunity.

Maybe, maybe not. I know that’s not a definitive as some of you might want, but short term calls are tough.

Perhaps a partial position is the answer, keeping in mind there could be lower opportunities in the future.

Comments and questions are welcome.

The Awesome Apple

Despite the huge personal win in SPKL, my position in AAPL has been the biggest win of 2007 from a trading perspective.

I took my position when I published the August 18th edition. I mention it near the end. I bought 10 January ’08 AAPL calls at $12.30 per call- total investment $12,300. I purchased the right to buy 1,000 shares of the stock at $130 until the options expire in January.

The stock closed at a little over $170 on Friday, and that $12,300 investment is now worth about $43,000. A fabulous trade for two months, and one of the best of my life.

I am tempted to cash in. The chart told me $172 was an LPO (logical profit objective) for the stock. However, I have been doing a little reading of late, and I just might hang in there, or perhaps only sell half.

Here’s what’s happening in my view.

  • Early returns on the iPhone are coming back with huge customer satisfaction numbers.
  • 16% of respondents who are planning a cell phone purchase in the next 6 months are planning to buy the iPhone- that’s an amazing number
  • At the end of this month, Apple is getting ready to announce a whole bunch of new products- the new Leopard operating system is driving the highest MAC sales cycle in history
  • iPhone sales won’t peak until about 2010- long growth cycle
  • iTV could take over the holy grail of entertainment- the family’s den.

In short, I now believe AAPL could be headed to something more like $225. Here’s the problem- do you buy it here? I hope you already own it, but if you don’t pray for a drop off into the mid 150′s- it may never come, but who knows. Tough to buy at this lofty valuation, but you might just want to hold your nose and take the plunge.

If you bought it when I first recommended from the $95 to $124 range, there might just be more upside, so you might want to hang in there a little longer despite the huge win.
Comments and questions are welcome.

Titan Teaming With Upside- Week in Review

Attention investors who like to make profits. TTGL is ready to go- I can smell it. It maybe next week, or it may be next month, but the action in the stock suggests to me it is close to another big leg up.

Let’s start with the chart, and go from there.

ttgl12.gif

This is a weekly chart- each bar represents a whole week, rather than an individual day, and it goes back to when I first featured the company at $.85.

The January to July time frame frustrated investors as the stock just couldn’t get through that $1.40 mark. There was a toxic seller, and the market was not robust enough to eat through the supply. Once it was finally accomplished, the stock scampered up the chart nicely.

We are experiencing a similar consolidation phase now, but I believe it will be much shorter- why? volume. Look at that huge volume bar this past week. In fact, TTGL traded 1.2 million shares on Thursday after the company issued its guidance. This is by far the highest volume day in over 2 years, and the highest dollar volume day in this stock’s entire history. It was huge. The will break out will happen much faster because the volume is much higher.
Friday, TTGL finally announced it will be spinning out the money losing PCB division one of two ways- either way a big benefit to shareholders.

Some investors might have been disappointed that the stock did not trade higher this past week, but I see it the opposite way. Whoever offloaded a pretty big piece of stock gave you an opportunity to continue to accumulate before it makes its next big move. This might be some left over stock from past toxic indiscretions, but we are rapidly nearing the end game of this company’s past financing faux pas, and moving to a much higher level shareholder base.

I strongly recommend the continued accumulation of TTGL with an eye on another double. Could take six months to a year, but worth waiting for. Fundamentals suggest a far higher valuation.

Comments and questions are welcome.

Pickle Powers Out of Atmosphere

We’ve been lucky. For those of you who didn’t catch it, the Pickle got a little national recognition on Monday morning via the Today Show.

A segment entitled “Investing 101 For Women” featured a young woman’s adventures in the investing world. After taking some money out of a 410k, buying a house, selling a house for a profit, and investing in the stock market, here last move is to invest in a restaurant chain- and- they flash a picture of a Spicy Pickle restaurant. Awesome. Here’s a link to the video clip:

http://video.msn.com/?mkt=en-us&brand=msnbc&fg=rss&vid=148d5e1e-5b80-4e7f-86f8-212a04f4bb3f&from=05


At this point I believe the stock is going up because it is going up, and I also believe it is overvalued at this level. I have been a seller, and will continue to be at this lofty valuation.

I believe this company will have a breakout year in 2008, and the stock could go higher than where it is today. I’ll have a look at the chart when it cools off. For now, I believe you should be taking some or all of your money off the table, and waiting for the stock to cool off.

Here’s the chart:

spkl13.gif

Simply streaking. And I thought it was more of a sell at $1.30. People call me all day long and tell me they are not worried about the price- they like the growth potential and love the food.

The momentum is fun, but it will head the other way when the investors who are buying the stock because it is going up decide to sell it because it is going down. Don’t get caught holding the burning match when it burns down to your fingers.

Comments and questions are welcome.

Pickle Power- Break Out To New Highs

Well, SPKL is powering higher today on pretty big volume. And, just like the last BLOG I posted on this stock, I would advise you not to be a buyer. I felt the stock was fairly valued at around $1, but the concept has clearly hit a hot button with investors, and the price performance of the stock has outstripped my expectations.

If anything, on today’s high volume, I would suggest taking some partial profits if you were in when I first featured the company at $.80 last month.

You can use SPKL as a great opportunity to “trade around a position”. This means you have a core position you hold for the long term, but take a certain amount of your position to sell on surges, and buy back on pullbacks.:

Here’s the chart, with an idea of where I would buy it on a pullback.

spkl12.gif

It’s pretty clear that at this point in time, we are not going to get a 61.8% retracement in this stock. It is more likely we will see a 38.2% retracement, just as it did last week. I was pretty short lived.

The 38.2% retracement would take us to about the $1.10 level, which is where I believe the stock could pull back, and probably should pull back to.

In summary- not a buy- a sell, partial sell, or hold. Look for a technical pullback to $1.10 to jump back in.

Comments and questions are welcome.

CREE Gets Barron’s Bashed

I absolutely love what’s happening to CREE right now. If you are following the situation, you know the stock has not traded well in the last week. The naysayers are out in full force, and they have the publicity machine fully geared up.

Last week, a rather obscure analyst published a sell recommendation on CREE, citing the company’s struggle to sell its products.

The stock swooned to about $28 for a day, and then rebounded to $29 the following day.

I don’t necessarily find fault with the analyst’s viewpoint. Perhaps sales will flounder a bit while we are waiting for adoption.

However, on Friday, I saw one of the most transparent pieces of journalism I have seen in some time. Barron’s, a widely recognized shill for short sellers, published an article bashing CREE, and citing the analyst’s report for all the reasons the stock should be in the teens.

Author Mark Veverka simply spews out a regurgitation of the analyst’s point of view, and embellishes the whole story. The bottom line- the short sellers who are short CREE didn’t get enough of a drop from the report, so a follow up article magically appears in Barron’s. CREE happens to be a very heavily shorted stock, shorts are looking for ways to bash the company.

Here’s where the whole thing loses credibility. Analyst Dorsheimer, and Barron’s author Veverka both claim GE will never buy the company. Here’s my question for you- How would either one of them know that? I feel comfortable making the assumption neither GE or CREE is telling these bozos what’s going on behind the scenes, and therefore they cannot know. I don’t have any idea if it’s going to happen, and moreover I can’t find out.

The shorts are upside down in this one. Today’s reversal is killing them, and the smear campaign could continue. Here’s today’s late chart:

cree11.gif

Sorry the chart is a little busy. Look at today’s sell off and reversal. We traded all the way down to $26.43, and are now trading in the $29.50 range.

Could the analyst be right? sure, numbers could be weak. Are you ready to buy a $25 light bulb, even if you knew it would save you a substantial amount of money in energy and replacement cost?

Keep this in mind. No matter who makes the bulb, they will be using a CREE chip. So, when the get the price down to $10 to $12, and everyone wants the bulb, you will be paying a lot more for the stock.

The shorts have given it their best shot, and the stock is coming back strong. It’s a strong buy.

Comments and questions are welcome.

Pickle Continues To Power: Here’s Your Entry Point

I’ve had lots of emails and questions about SPKL- mostly, where to buy the stock. For those of you who read my last BLOG, you know I was negative on buying in the $1.20 range, and more inclined to sell or hold.

I spent some time with the charts today, and came up with the following:

spkl1.gif

I measured back to when the stock had its first big volume day and started climbing. As you can see, the .382 retracement puts us at about $.98, and the .618% retracement puts us at $.82.

In this case, the fundamental case and the technical case are pretty much in sync. As I stated in my original presentation, I felt the the company, frozen in time, was worth $1 per share today. With more growth would come a higher number.

The .382 retracement would put us just under $1, which I believe would be a very favorable entry level. It could drop down to the .618 level of $.82, but that doesn’t seem likely in the near term the way this issue is behaving.

Here’s a strategy suggestion- If you see it under $1, commit part of your resources and keep some capital handy if you see it below $.90. There’s your entry levels that gives you a high probability of success. Also, the longer term the chart, the better predictor. This is a pretty short term look, so you never know. for sure.

Comments and questions are welcome.