TAKE-OVER?? Yea, that is always a possibility, BUT UTX is dealing with an established company with a VERY GOOD RECORD of supplying the customer with dependable products.. I would doubt that UTX would want to take the Capstone name off of the product... instead UTX can profit by supplying MORE "parts" and ALSO investing (we talking buying stock in company here) in the company to take advantage of the "trend"... That's how some of the big boys do it... not all, but some...
Now, why did I say I "hate this part"?? Once UTX makes announcements (or Capstone) that the two companies are united in increasing the production of products, the SP will go totally ballistic... I will have to "hold" for much longer periods of time at that point... too volatile for day trading (for me) when that happens... ALSO when/if UTX begins acquiring stock in CPST it will have an even more "aggravated" effect on driving up the price... This is the "pits" for guys like me, but I will "deal with it".
What is the "time line"?? That is the problem... at the rate that business is moving, PR's to "this effect" could be announced AT ANYTIME... it could BE REALLY SOON in order to put the potential customers "at ease" and retain potential orders.
That is mechanical.. there are other functions that will come into play.. those "functions" are CURRENTLY "in play"... Chart diagnosis is a GOOD TOOL, but ONLY ONE in the tool chest..
CURRENTLY chart "reading" can be "useful" in making daily trades if and only if EVERY trade is also being monitored (as in every trade ask/bid, volume/price).. PLUS one must be cognisant of the global and national directions AND paying attention to the actual company that is being traded.
That being said -- The company in discussion is becoming more and more difficult to "day trade" (I hate this part)...
As "most" of us have known, the "company" was on the verge of several PR's.. well, I wish they were a little more spread out (I have been making a nice living day trading this stock)... The PR's are beginning to avalanche (not all bad)... The "latest" one (Brazilian distributor) is interesting... -- Recently many on the board have been "complaining" about overhead costs within the company... a large portion of those "new expenses" has been channeled to sales... the sales are NOW beginning to show results and new potential results (distributor) --
It is rapidly becoming evident that "the new product" (C200) and most likely many of the old models are becoming a high demand issue (I've gone through this same scenario with my own company).. This NOW presents the backlog of orders problem.. plus that fact that many "customers" are "hot to trot" and do not want to be put on a waiting list...
Soooo, the company has been in business for 20 years.. has a viable product that is "just now" gaining a logarithmic demand.. There are two options here.. the current management can "deal" with it, or a take-over company can "deal" with it... bottom line here is that there is a very large INCREASE in demand of a somewhat limited resource.
Sooo, there are FIVE companies currently producing micro turbines... Capstone being one of them.. The other companies can "take up the slack" if the customer so deems, BUT Capstone has not voted for it to happen in that direction... they have already developed a new product (the C200) and UTX (a parts supplier) has opted to finance a production line to produce the product... those financings were formulated along "best guess" (conservative.. and I do like that)order schedules... those "order schedules" have morphed out of control... the customer is asking for MORE/SOONER... UTX is the "deep pockets" entity here (also getting 10% of the new product besides their "regular" profit on parts supplied)... UTX will NOT be willing to turn over portions of the "new demand" to those other 4 companies... UTX will most likely conference with CPST (today???) and begin asking how "we" can solve this dilemma and supply the DEMAND... a "new deal" will/should be negotiated between the two companies and UTX (deep pockets) will put CPST production capabilities onto a "fast track".
Based on the December price channel 1.90+ looks possible in the near term but anything can happen. I have a feeling tommorrow is going to set the mood. Price is resting right on the 13 dma. Other positives are 50 200ema cross, product developement and sales and the new green world. Stochastics are turning down after hitting highs but remember last time they did the same thing and we shot higher.
If we can survive the next couple days the next resistance is the 1.97-2.04 area.