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:
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.
In the future, would you expect press releases along the lines of, “Spicy Pickle, Whateverville, VA opens its doors” ?? It would make sense that if they announce new franchise deals (“Gatorville”, FL) that they would also announce a store’s grand opening. Just curious. Thanks, as always.
Editor: I’ll mention it to the company. I’m sure they will comply.
If it’s going to drop back, I suspect it would cover the gap. I didn’t check the exact number, but from your chart it looks like about .72 or so. That would be my entry point. Gaps are nearly always covered. Unless SPKL has something to ad to their story, it wouldn’t be much of a stretch to cover the gap during its retracement.
Editor: Perhaps. Closing gaps can be very bullish. I’m not going to suggest it won’t happen with this idea, but I don’t believe it is likely.
You have had many, many picks over the years. With all of those in mind, where does spkl rank in terms of its potential? Specifically, on a scale from 1 to 10, 10 being the best pick you have ever covered, where does the Pickle rank? Thanks for answering this subjective, goofy question.
Editor: It’s the best idea I have ever had for a consistent, predictable, growing company. On the other hand, it is not the kind of company that could have an epiphanal event that could completely change the company overnight- they can’t have a huge technology breakthrough or some huge purchase order that would change the complexion of the company overnight. The best one of those I ever had was NTWK- started at $3.50, went to $1,80, then hit $75 in March of 2000.
Someone thinks the company is worth more than a dollar. It just doesn’t “want” to stay below a buck. Is it reasonable to assume it will go below a buck again? Is that pushing it?
thx
Editor: It certainly doesn’t seem like it wants to, but you never know.
I will be heading out to Las Vegas at the end of October and noticed that there is a store 8 miles south of my hotel. I am going to take a cab down there and try the food. I can’t wait!
Editor: The Las Vegas store is run by a guy who used to run three Applebees. It is in Henderson, about 10 or 15 minutes from the strip, right across the street from a medical center. This store is doing extremely well, and has an excellent operator. He is already looking for 2 more locations. Find the franchisee and ask him what he thinks of the company.
what do you think the up side is long term for spicy pickle thanks
Editor: Long term can mean a lot of things. I consider long term to be over a year, as that is when you get long term capital gains. The answer- 2 to 5 years- $3 to $5.
The stock is breaking out again. It is hovering around $1.37 as of mid trading day today. It seems all on hype as there has not been any real news. The announcement of 2 new store openings cant seem to justify a 40% jump. It is better to hear of 2 new franchise signings.
Where do you believe the price will retract to for another buy in and why this hype?
Thanks.
Editor: I posted a BLOG yesterday morning suggesting the stock would be a buy in the $1.10 range. If it keeps climbing, I might revise that point of view.