I was listening to Cramer tonight when he announced FTEK. I opened up the chart fully expecting to see a stock at its all-time high that looked like the price was about to jump off a tower. What I saw was an awesome cup/hand formation where the price peaked and has pulled back nice to a point where I think it can move forward. There is a double bottom put in on the chart. I opened up Morningstar to see a glowing report with a 40 dollar price target. I like reading the Morningstar analyst commentary because they usually do a thorough analysis and I can quickly get a read on the company and its direction. I think its 19 dollars up from here.
Check it out. Its technically perfect. This stock makes the most sense to long right now. Start from 2005 6.85X1.618= 11.08 Next top=10.13 10.13x1.618= 16.3 Next top=18.80 18.8X1.618= 30.41 Next top= 29.68 29.68x1.618= 48 You can draw trend channels, use Fibonacci retracement, the golden number, cup/handle thesis, Average Volume (3 month)3: 387,452 Average Volume (10 day)3: 397,389 Shares Outstanding: 22.09M Float: 17.07M % Held by Insiders4: 41.03% % Held by Institutions4: 32.10% Shares Short (as of 12-Mar-07)3: 476.29K Short Ratio (as of 12-Mar-07)3: 1.1 Short % of Float (as of 12-Mar-07)3: 2.80% Shares Short (prior month)3: 460.76K There is only one trick here and I cant tell if the bottom is right now or 6 dollars lower. If you multiply all the notable lows by 1.618, then you get the next lower price target. Here is the analysis: 3.94X1.618= 6.31 Real low=5.1 5.1X1.618=8.25 Real low=7.24 7.24X1.618=11.71 Real low= 10.07 10.07X1.618= 16.29 Real low=???? Notice how the calculated low was actually higher then the actual. So if we calculate a 15% error possibility then the actual low might get to 13.84. The trend channel suggest the bottom is at 14 dollars. I looked at the 50 WEEK moving average. The price has not notably gone below that average since 2004 where it appears to have danced along it. (note, this is the weekly chart I talk about and NOT the daily) During each of the lows, the price stayed around the 50 week moving average. In 2006, the price went 10% below the line. The line right now is set at 19.67. 19.67X.9= 17.7 worst case scenario. As for the Bollinger Bands (again talking on the weekly and not daily chart), the analysis is the following. In 2006, the price seemed to brush right up against the lower band before turning up. In 2005, the price danced around with the 20 WEEK moving average or mid Bollinger Band. The price right now appears to have done a double bottom with the lower band. In analyzing the relationships of the lows, I have found the following 5.1/3.94= 1.2944 7.24/5.1= 1.4196 10.07/7.24= 1.39088 You would think the new low would be put in somewhere around 14 with this relationship. However, I noticed that the bottom trend line changed from 2004 to 2005. The pitch became 33% steeper. So I drew lines along the 50 week moving average which has been a reliable pivot point since 2004. I found that the pitch of the 50 week moving average changed in early 2006. The resulting pitch would put the bottom between 20-22. I studied the RSI and noticed that when it got under 50 on the WEEKLY chart since 2004 then that was the time to buy. My prediction is that this will go to 40 dollars in three months time. **Then it will be time to sell FTEK off along with every other stock in your portfolio** Reason being is that a bearish wedge is forming on the weekly chart and FTEK has reliably predicted every market pullback since 2004. When FTEK reaches its price target, then its time to get out of the market or short it. When FTEK does fall, it falls hard along with the market.
I started trading only a few months back and I really enjoy reading your technical analysis of stocks. I don't understand most of it but I keep on reading and looking at other traders post and hopefully all understand more as time goes by. Thanks for putting in the time to create the post and passing on your T/A.
Thank you. Remember, though, that I am not always right. Im just looking at a chart and telling you my opinion on the issue. Do your own homework and due-diligence. Time will tell if Im right and I have been wrong before on different things. I have a list of items that we wont talk about...
Beauty is in the eyes of the beholder. At times a wind sock is more effective than a crystal ball. There's always somebody on the other side of the trade.
I'll give you the negatives though. There has been a lot of selling since the start of the year and the stock is under the 50 day moving average. My calculations state that this is normal for this equity. It swings up and usually sells off until the 200 day or 40/50 week moving average. Its a highly speculative small cap stock and the market appears to be favoring the large cap variety right now. In 2003,2004, 2006 the market loved small caps. In 2007??? The market has been moving up the last week and this has been moving down. This stock is a small cap growth stock with a high P/E, no dividend. The good news is that part of their business is international and the company is managed by a group of executives with longstanding in this business. They feel very confident that the company will succeed. The world loves clean energy right now so this type of technology is definately in vogue. If you want an entry point, then maybe its best to wait to see where it goes. Attempting to predict a bottom is a risky game where as jumping on an obvious up-trend is easy money. Im not completely certain if the bottom is in. Maybe the Cramer pump will set it in an upward motion.