lowtrade

[lowtrade]

GEVO

I thought your reason to enter was the news hype with price spike. Happy your decision was based on logic, not emotion.

The very first thing I did, when I saw the chart, was look to see when the delisting notice was reported. Any NAZ stock under a buck, must get price back above $1.00 for 10 days, before 6 months of notice or delisting to the OTC is possible. The notice was JAN 26. So this price action could have been expected. It's cheaper to buy a buck in stock price, then fight delisting, without a major improvement in the last 2 Q's financials.

I can't say how many times I've seen under a buck big board stocks pop like GEVO did. What was different about GEVO was how quick it retraced. This was unusual and told me, event though the huge emotion gap was well timed with strong news. The existing poor financials and terrible management performance kept shareholders from changing their mindset.

Event though everything you posted was completely logical. What you missed was the real reason for the emotion gaps up. If it was because investors felt the news would turn the company around, the price would have remained above a buck for 10 days. Since it didn't, I don't see any change in shareholders mindset. And that mindset is still negative.

Take all this and IMO the odds for a emotion gap fill is way lower then normal emotion gaps. The thing I'd like to say to you and all readers is "When you see large emotion gaps to $1.00 at the big boards. You don't want to see emotion gaps down after." Because a REAL shareholders mindset change did not occur. They still don't like the companies odds for a comeback.

As for your trade, keep an eye on volume as price moves. Odds are the news may have delivered new blood to the stock. So it could climb for a while, while they buy in. But the minute you see volume decline, as price climbs. You are being told new blood interest is reaching it's entry end. Then expect a retrace and take any profits on the first red day. A red day with increasing volume doesn't require exit, but with decreasing volume does.

Look at EPS,ROI, Margins, and short interest and check news for delisting 6 months back here;
http://www.finviz.com/quote.ashx?t=gevo