GEPT has opened today above the downtrend line suggesting a trend reversal may be in the offing.
The stock is not trading with the velocity it had back in December, but we are in a much different market. Right now the market is wrestling with higher oil prices and rising interest rates. Commodity and commodity related stocks are all the rage.
Therefore, I’m not expecting anything like the four point move we had in December. However, the stock is much more reasonably priced and is giving you the opportunity to pick some up without charging up too rapidly.
The trend reversal has occured until proven otherwise.
For traders- Pick it up here with a tight stop in the $3.30 range- if it falls back below that number the trend reversal will be in question.
“For traders- Pick it up here with a tight stop in the $3.30 range- if it falls back below that number the trend reversal will be in question.” Still a hope?
Editor: As I stated in the BLOG entry, traders should sell the stock if it drops below $3.30. It did, and if you were a trader you should have sold. This is not the case if you are an investor. If you like the company and want to hold the stock for the longer term there is no problem. The company is growing and doing well.
BOUGHT AT 4.56 0N YOUR RECOMMENDATION. WHERE DO WE GO FROM HERE?
Editor: It depends on you. If you read my last BLOG entry on the stock, you will note that I stated short term traders should sell the stock if it breaks below $3.30, which it did. If you are a trader you should be out. If you are a long term investor then watch what the company does. If you like where they are headed, then hang in there.
For someone in Stan’s position, would you average down?
Editor: I’m glad you asked this question, because it gives me the opportunity to share my views on “averaging down”. First, I cannot comment on Stan’s situation because I don’t know how much he has in the stock and what is suitable for him. I don’t know how much risk he should take, and I am not qualified to judge because I am not a financial planner. I am just a source of ideas for the speculative end of you portfolio.
I don’t believe in the whole concept of averaging down. I do believe in asset allocation. When I decide to buy a stock, I have a game plan. I decide how much I am willing to commit to the position, and generally start with about 25% of the postion. If the stock trades against me, I will add to my position a little more quickly. If it trades for me, I will wait for pullbacks to add to my position.
Once the position is establish I set a time frame and mental stop loss. Time frames are much different for different types of stocks. The smaller the company, the longer I am willing to hold it. Whe the small ones get hot, they get hot, but you have to be there in advance.
You have to have your own style. One thing I do recommend- make your own rules. Be discliplined and stick with them. Hope that helps.
What is your opinion on the happenings at this company…is this a time to cut loses and go on?
Editor: It depends entirely on what kind of investor you are. If you are short term then, yes- time to cut your losses. I don’t see it as the company’s fault- Homeland Security companies are out of favor right now, and when the pendulum swings back, the stock could do well again. In the meantime, the company is adjusting it’s business focus in the right direction, and long term it should be fine. When I published the edition entitled “Short Term Traders Get Out”- that was the point. It was published on April 2nd.
Can we take heart from the price move last week, or is this a flash in the pan?
Editor: I have been speaking with the company lately- there is some good stuff coming but there are no guaranttees as to how it will effect the stock. The short interest is huge in this one, so there may have been some short covering in the strong week.