It strikes me we are past some of the summer sell off lows, and several of our ideas could be ready for dramatic rebound phases. EFSF, NIHK, and CPNE all look ripe for rebounds, but I believe EFSF is the one to jump into today.
Last week, the company announced it was in the final stages of launching an ecommerce Cinnergen web site. Clearly, this means sales are not off the charts at the retail locations, but the company is taking steps to sell more product. It strikes me as a good move on their part.
Most of all, I like the chart. As you followers know, I love buying stocks at 61.8% retracements. I don’t like trying to buy them when they are falling. The old saying is don’t try to catch a falling knife- you’ll get cut. However, you have to look at them once they have fallen and are climbing back.
Here’s the EFSF chart:
Going back to the big upleg which started last January, the 61.8% retracement of that whole move is in the $.31 range.
The stock sold off rather violently in June, and capitulated down to about the $.25 level. It was at this point you needed to exercise some discipline and sell if you were short term.
However, it rebounded very quickly back to the $.30 to $.32 range, which tells me that is where the support lies. And, of course- it happens to be the 61.8% retracement level.
EFSF looks like it has great support at these levels and is ready to rebound. It’s simply a technical observation. The performance of the stock is a bit like getting the flu. It was sick for a while, but the patient is stable and clearly recovering.
Accumulate EFSF for a breakout move now. Be in before the patient returns to its former powerful self. New SSL- $.235