Jim, No need to apologize. High today so far was 10 3/8.
My read of the technicals is as follows: Stochastics
(both fast and slow) have now crossed the 80 mark.
My understanding is that technically is bullish and
often technicians use that crossover point as where
they initiate buying. OBV (on balance volume) continues
to show an upward slope, meaning there is more buying
on upticks than selling on downticks...so there gradually
is emerging a situation of more buyers/buying than
selling...ie accumulation. Relative strength continues
to show good improvement, and is on an upward trend here
as well and confirms the previous. Money flow is trending
upward (very slightly) so the move here should be slow and
gradual. It is however recovering from being in heavily
negative territory - which to me is actually a positive
as it indicates an oversold condition - which we both know
to be true...Endosonics is undervalued here. And even if it
should stumble over the near term, the risk/reward ratio is
heavily weigthed toward the reward end. Because it is
oversold, and fundamentally undervalued, and the trends
are positive, I doubt this stock will go below $9 from here
(though i have been wrong before), so possible loss is 10%
(from $10), but possible gain should be at least back to
the 12-13 area, which would be a 20%-30% gain. There was
also insider buying up to I believe $11.88, so $12 should
be achievable over the near term. So at minimum reward
outweighs risk 2-1, at minimum. With Robertson Stephens
price target of $18, and Volpe Welty's price target of $21,
the reward ratio is obviously/ultimately much higher.
Now if my reading on the TA/technical stuff is off base
anywhere, you or anyone else here make sure and correct me.
As some final additions, I also detect biotechs and small medical
stocks acting better and showing good gains, so money is coming
into the sector in general, which should also help a company
like Endosonics. ESON also has no real Asian exposure, so that
should isolate it should that region begin to deteriorate again,
limit downside, and lend a certain attractiveness to it as an
investment for investors looking to avoid that kind of exposure.
ESON also has a demographic play to it as well. As the population
ages, and they see how little they will actually be receiving
from Social Security to live on, hardening arteries and chest
pains will become more prevalent (just kidding here folks).
Just some thoughts. Good luck to us all. Peter. |
