Thought I might post a few thoughts about the recent trading in IIP.
I'm still holding long and strong (at least to the point where it's pretty evident that the shares are definitely overbought and it's time to take profits and wait for a re-entry opportunity).
I still believe the PnF chart is indicating the stock is heading to $3/share. PnF has proven itself as a very good confirmation analysis on the price targets of stocks. It's just a question of when that target will be reached.
I was actually thinking we might see a retracement today back to 1.20/share and was almost tempted to sell my trading position based upon that belief. But it just wouldn't sell off. And I consider this a particularly bullish sign that were looking for a major spike upward and will look for a day where it's obvious that their major distribution of the stock before considering profit taking. I just don't want to be out of position when this thing takes off.
Of course, earnings might disappoint, but I don't believe the trading action, and accumulation we've been seeing, indicate this expectation is likely. In fact, the specialists have been doing some yeoman work trying to keep the price rise in check in the face of all of this money flow.
I think tomorrow we might see a move up to $1.50-1.60+/share. The reason I believe this is because the price volatility was practically nil, and the hourly stochastics are now indicating an oversold condition:
bigcharts.marketwatch.com
Notice how the 20 Hour MA leveled off and returned to its upside bias? And the periods of distribution were far lower than the periods of accumulation.
Now I will admit that the daily is less certain, as the stochastics indicate overbought and they have rolled over.
bigcharts.marketwatch.com
HOWEVER, despite the oversold stochastic condition, the past two days indicate accumulation of the shares. Thus, tomorrow's action, if I'm correct, should turn this stochastic back to the upside.
And I have to admit that the Cup and Handle formation that has formed indicates that most of the week hands have been chased out and that it's time to move the price higher to a point where the specialists can reasonably sell short in order to prepare for a pull-back and inventory replenishment (since it would seem they've been selling quite a bit of it at these lower prices and they must approaching a point where demand from preferred institutions is outpacing their ability to provide supply). Thus, they will need to take it substantially higher to find a comfortable price where they can safely short the stock. (this is just kind of my "sh*thouse impression of the trading action, so "caveat emptor).
And if y'all input the weekly time frame, you'll see that the weekly stochastic still has some upside potential before arriving at an overbought condition.
Hence.. We should be arriving to a point where the artificial lid on this stock is going to need to be released.
Hawk |
