Cartonet: I have seen strong support in the high $12 area, but we have yet to see an uptrend confirmed by volume.
Usually you see this uptrend on volume after a similar scenario: severe drop, stabilization with small spike up after a day or two, then a second smaller drop and then breaking through the first drop resistance which is now $13.50-$14.00. The first bottom is usually not the real bottom. Therefore, I anticipate a small drop to low $12s or high $11s at which time and if we see a rapid bounce I will buy putting a stop loss a few cents below the LOD. If I would guess blindly, I would say that we will see that drop today and will close in the green at the end of the day, but that's only my guess which is worth what you paid for it, nothing.
On the other side, if I see large blocks going through at the ask and fly through $13.50-$13.90 today I will buy. A prudent investor would not be greedy as myself and would buy the last shares on the ask at $14 if I would see strong bids right below.
From another perspective, if you are not as greedy as myself, you would buy now and hold as you are right, this is a tremendous buy, as we always see an exaggerate reaction from the street when earnings are not blown through. I also think that because of the slowdown in the economy and in housing, multiples for renovation/construction companies have been reduced (see HSOA, ADDL and IPII, all coming out with strong results from Q2 but taking a severe haircut), so I wouldn't expect any major upward correction anytime soon but I think we will stabilized in the mid $14s before the end of the month.
Only my opinion. |
