I recently found this message board. I am not an expert trader, but I have found many ways to lose money. However, I do have a good knowledge of Elite - good enough to have accumulated 250,000 shares. If you will permit me, I would like to offer my perspective of the current position.
I had a series of stop loses set in the 32 - 34 pps range. They all triggered in the past two days and my entire holding was stopped out. I had drawn a chart lower trendline beginning at July 22. The line for today had a lower limit of .317. That limit was decisively penetrated by the day's low of .301.
I have done a great deal of reading and there are several points mentioned by just about all of what I consider to be the best references. They are: 1)Sell quickly if your loss goes beyond 7 or 8%. 2) Never average down (the point made to not throw good money after bad). 3) Chart patterns are the same today as they were 50 or 100 years ago. The reason is that two strong drivers of stock prices are human nature or crowd psychology and the law of supply and demand. 4) If you want to be a successful trader or investor, you must find a way to control your emotional response to the market. One way to do this is to develop a successful strategy and stick with it no matter what. Remember that investing takes hard work and an unusual degree of self-discipline. That's why only about 10% of investors are consistently successful.
Another important point is to accept the fact that all issues affecting the value of a stock are reflected in its current price.
Now back to Elite. The insiders at the company are expecting the price to come in at about $5 per sh. when the new products enter the market, a market that is estimated to be in the multi-billion dollar range. Nasrat is doing an excellent job and he has good connections with influential people in some of the larger pharmaceutical firms. He would like develop a working arrangement with one of these firms. He would also like to get the company re-listed on one the exchanges. As we all know, the key to future riches is to get the first several new products on the market, probably the most likely time frame being early 2015. There may be one or two developments in the interim that could increase buying interest and raise the stock price, but nothing like what can happen when the new products create the first true profits for the company. Is it a slam dunk? Unfortunately, no. Everything hinges on getting FDA approval and although Nasrat has enlisted the best companies to carry out the trials, one can never be certain about what the FDA may do. Even if they only requested further testing, that could incur a substantial in approving the new products. One can also not fully anticipate what may happen in the required trails. Any problem could keep the new products off the market for a significant amount of time. The worst case scenario would be a rejection or significant delay in FDA approval, an event that could endanger the financial viability of Elite. Based upon what I know about their new products I doubt this will happen.
My plan is to buy back my position at somewhere near the current price of the stock (I think it may still have a bit further to go down in price, but not much.) I have already entered some buy orders. I think for those of you that where clever enough to buy in at the single digit prices, you may want to look for a buying opportunity when the stock begins to turn up, if you have the resources to do so. For those of you who, like I was, in a negative position I don't know if you want to sell at this point with the expectation that the stock price may yet have a way to go in the downward direction. That is a tough call. In any case, I think we can all look toward a bright future. Good things come to those who have ability to tough out the negative times.
Dr. Tee