Before I head off to bed tonight I would like to inform everyone of what i think will happen to CVI's stock in the morning! :)
CVI begin its drop on monday morning and fell strong into tuesday! Until wednesday when it opened higher! Here is where i read a lot of posts on-line and it seemed all bulls where happy and enjoying the new open, wednesday was a good day for bulls, wasn't it bulls?
I traced the stock back for a few years and on the daily chart whenever it fell strong for 2 days it bounced back and continued it's gain for about 2 days. Roughly after 2 days of gains it crashed hard! This is exactly what is going on again, read the charts and you will discover for yourself that this is usual behaviour for CVI. I am not worried at all about CVI's gain today, heck i won't care if they gained some more for the rest of the week. Sooner or later longs will sell out and people will realize how over bought this stock is.
It's only a matter of time before people start shorting the pants of this thing!
I agree with you, there are several other factors that will cause this stock to come down on friday and one of the biggest reason is that on friday people will actually start selling out their position before the weekend. Most people that swing trade don't like to hold on to a position over the weekend, i know i wouldn't. So what do they do, they sell! And trust me there are tons of swingtraders on CVI and also hedge funds that swing trade, they will all sell out. Bulls will start selling which will cause the price to drop :)
It can only go up so much! a wise man once told me that, even a company that comes out with a cure for AIDS will go up but only so much! Yes, any company that comes out with a cure for AIDS will sky rocket beyond our imagination but there has and must be a number that it settles on. Now let's say that this stock sky rockets to $100.00 per share but guys like you and I, who actively trade and know what a company should be worth on the stock exchange will tell you that its only worth lets say $80 dollars. This example shows you that this company is overbought by $20 dollars, guys who are swing traders and scalpers love to jump on stocks like that and short them, they will short it into the ground. I said $80 would be a good price for this stock but when people start selling they keep selling until it is oversold, now the stock might be worth $50! What will happen now? well people are going to start buying until its overbought again, and that is the basic cycle of a stock.
CVI is an overbought stock, meaning people are now going to start shorting it!
I began shorting it on monday :)
what goes up must come down!
Remember this if you don't take away anything else from my post: "It can only go up so much!"