A reverse split is seen as a sign of weakness, an artificial mechanism to build the stock price up. Psychologically equivelent to the opposite of a 2 for 1 split.
Good point on STRONG BUY upgrades when the stock hits new highs, but I think there is an important distinction between an upgrade on a 52 week high as opposed to an upgrade at an all time high. From an analyst's position, the first example is in the line of duty of supporting a stock that you have touted, the second example is in the line of duty of taking profits from a stock that you've touted.
LH is not the best fundamentally sound stock that I could find. Debt from merger is still too high, for example, but the fundamentals are decent. I like the chart more than I like the fundies. The only thing that "smells" about this stock is the reason given for the reverse split. It sounds fishy, but on the other hand, it looks like they sold it to institutions before publicly announcing the reverse, judging from the volume.
Anyway, to make a long story short, I like the TA on LH and
don't plan on holding it for much longer.
We're in synch on the ta on MXTR. Failure to break 7 results in a negative MA crossover and short term loss. Yuk!!! But I like the risk/reward ratio and forgive the repetition... but I'm using MXTR as a proxy for bottom fishing its sector.
Sure, a new licensing deal wouldn't hurt, but IFLO,IMO needs renewed institutional support in the next few weeks. Will Wedbush Morgan continue to support the stock and will institutions continue to buy? Ken, there is an overhang on IFLO similar to what IFCI overcame (same reason) and there is also a lot of profit taking from smarty pants who picked up cheap shares. I don't know how the next few days are going to play out. I don't need more shares is all I know.
HBI is a different story. There is a long term down trend in the chart. There have been sparks indicating that a turnaround was imminent, but so far the downtrend is intact.
Kiplinger's to BizWeek and more have come out with favorable articles regarding HBI as a value/potential takeover play. Sooner or later....
If you choose to hold your shares, I would like to suggest selling the short term covered calls at the strike price of 5 before the time premium is expired and buying back the options when the premium evaporates. This strategy would give you a handsome payoff each month until the stock makes a move. If a short term move comes, you end up with a 60% gainer. If a short term pop isn't in the cards, you collect
the premium each month.
Going to check out who the Millionaire buying the wife on tv is. LOL
Good night Ken. Thanks for the discussion.
Sergio |
