The big news from GEPT was not big news for the market today in the early trading. The stock closed yesterday at $3.06, and reopened today at about $2.80. This could mean one of two things. Either the stock had moved up in anticipation of today’s news and frontrunners were sellers, or the market simply did not like the news. When a group falls out of favor, it falls out of favor.
The bad news- the stock does not appear to be setting up for a short term trade. They are tough to come by these days. The good news- if you believe longer term that money will flow back into this sector, you can now pick up the stock at the same level their recent $5 million funding source is locked in at. Other good news- I have drawn a trendline in the chart. Despite the early knee jerk reaction, the stock has not violated its uptrend and appears to be bouncing. The current trend seems to be intact.
As always, I am interested in your comments and/or questions on this one. Please feel free to have at it.
I am confused as to why gept stock holders benifit. They have a minority position which cost them millions of $s in cash and stock.
Editor: Because it gives them a much more prolific engine for growth than they currently have. It may take some time, but Astrophysics is a very hot company it a very poor group right now.
This stock seems to have settled in at its blue trend line on the chart. Nothing real positive nor negative out there right now. When would you realistically expect there to be some news?
Editor: the company has lots of news to announce on new contracts. However, I don’t believe individual contracts are going to get this stock really moving. I believe money needs to flow back into the homeland security/defense sector for the stock to get going again. I believe it will happen after the summer as the gov’t starts spending the ’06 budget.
Is there anyway to tell if a big spike in price as today is due to heavier volume buying by ‘smart money’ since it seems to have happenedn in the last hour of the day?
Editor: My guess would be some sort of short covering associated with options expiration- or perhaps news next week of a major event. I wouldn’t get too wrapped up in watching this one day to day. If you are a short term trader you should be out. If you are an investor, this stock should trade well when money flows back into the currently completely ignored defense and homeland security stocks. You can check to see if the MACD has turned up. That’s generally associated with strong hands accumulation.
Short covering, I can understand, but what kind of “short covering associated with options expiration” would effect this stock?
Editor: Just traders closing out positions. You never know how some of these market makers are leveraged. Stuff goes on that regular investors wouldn’t believe. The bottom line- I don’t know the cause.
Why is it a good/bad buy. Whats going on with the company? What is going on now, and what is projected in the future? Thank you – Steve(Belgium)
Editor: I believe this stock is a good buy for mid to long term investors. The stock will continue to trade quietly as long as the homeland security/defense sector continues to take a back seat to energy stocks. When the pendullum swings back, I believe this stock will do well. The company is growing and landing new business in some new areas. The pending acquisition would be the icing on the cake.