I almost hate to say it or think it. Why? because visualizing this stock getting healthy is the surest way to sabotage any move.

However, looking at the chart, there does appear to be a “Stealth Rally” going on in CPNE at this time. Long overdue, but nevertheless here.

As shareholders of CPNE, we are all probably better off investing in a company that makes heart monitors- after all, this stock can give you heart attacks. It is about as volatile as any I can remember, and seems to do the opposite of what you expect.

Let’s review- From the January high of $3.40, the stock simply got clobbered when the market learned about the 4.5 million shares fund manager Jeffrey Feinberg bought directly from insiders at $1.90. Those shares are now in registration, and Feinberg couldn’t sell them even if he wanted to.

In its usual fashion, the stock over reacted and sold off to the $1.50 level, before beginning a rebound phase.

Here’s a look at the stock since making its 2007 low. The one day surge up to $2.37 happened when the company pre-announced Q1 earnings results. It was short lived.

The stock then fell back below the 61.8% retracement level, but only for a few trading days. It has since entered a bit of a stealth rally, trying to work its way higher by a couple of pennies everyday.

When I think of CPNE, two adjectives come to mind: Sloppy and Crazy. This stock is both. It seems to want to work its way higher right now.

Here’s the psychology of this stock- the drop to $1.50 simply freaked a lot of investors out. When it rebounded, those shareholders gave a collective sigh of relief and dumped the stock after adjusting their pacemakers out of the heart attack zone.

Now, we have come back to a higher low, and there are less sellers.

I believe the stock will continue to “drift up” for the time being until the real 10Q is filed. I still don’t have the EPS number for Q1. If it’s a big surprise to the upside, the stock will probably get clobbered. If it’s a surprise to the downside, it will probably run up. Who knows?

Here’s what I do know- it was last year about this time when CPNE announced its first break even quarter, and the stock was $.20. It’s been a wild ride since then, but all in all a very profitable one for most of us.

If they continue to deliver the numbers, the year ahead could be as good as the year behind. If you filter out all the noise, the movie is pretty good. You certainly can’t fault the CPNE on the performance side.
I believe CPNE is a buy right now.

Comments and questions are welcome.