The Pickle had held up quite nicely in the face of the current nasty Bear that’s been gnashing its teeth at every non energy non commodity company out there.
Today, the stock finally succumbed to the buyer’s strike, and broke below the ascending triangle which has been forming for the last several months, suggesting the stock wants to go through a corrective phase for the time being.
Here’s a look at today’s chart:
As you can see, the stock has broken down below the support level defined by the descending triangle.
I have been warning the stock was vulnerable for a downside push as it would appear the December financing has brought some sellers with a little market related impatience out of the proverbial woodwork.
I am not concerned about this turn of events as it is my expectation you are going to get some corrective action in most stocks in a Bear Market even if the company is delivering on all fronts.
This break below the support level also coincides quite closely with the 61.8% retracement of the stock’s entire big move from the fall- another technical negative.
In light of the great performance the company is delivering, here are my thoughts. I believe the stock at a very good level for accumulation if you are a long term investor- meaning you are looking for long term capital gains (more than one year).
If you are looking for an oversold trade for a quick move to the upside, I would avoid the stock at this time. There could be more downside work to be done before a bottom is put in.
From here, it will be interesting to find out what level investors find this stock irresistible. I’m guessing somewhere in the $.90 to $1 range.
This move might in fact be healthy for the stock longer term. It will no doubt clean out anyone with short term thinking on SPKL, and leave the stronger, longer term investors as the shareholder pool. We’ll end up in stronger hands when the rebounds start happening.
It’s worth remembering that SPKL is on an expansion tear. It’s also worth remembering that of the $6 million that was raised in December at $.85, $1.4 million came directly from board members.