I had a reader request GSV, which was otherwise a stock that was not on my radar. It is now, but too bad I missed the breakout. I just posted the annotated chart and commentary to Stockineer, but I figured I'd share the summary here with a little copy and paste job....good luck guys, this one's pretty hot.
GSVC is rocking with a recent breakout. Paulos is looking for some opinions…read on to hear mine. It sounds like the interest in this company is a result of its large Twitter investment.
Earnings were just announced which caused this recent breakout, but how far will it go? If you take a look at the chart I’ve posted below, I’m suspicious of a 100% retrace of the massive drop a year ago. In just a month GSVC shed 50% of its value and continued to drop over the next several months. Things look a little rosier now and a very quick retrace is possible. Often you’ll see patterns where the right side of the pattern looks like the left. This already happened once for this stock, so why not twice? That’d be very profitable very quickly.
However, I have my doubts as a result of the indicators because they are at extreme overbought conditions. They’ve never been higher. When this happens, you’ll often see a correction which will rectify these indicators. A flag patten is one such way where the indicators can be rectified and the climb can continue. Bulkowski discusses “earnings flags” in one of his books. These are flags that occur after a quick price as a result of earnings. This would fit that situation nicely, but it’s only a hunch right now. I’m going to keep an eye on this one because it could be rather profitable. I’m going to hold off taking a position until I get a better trade setup. I missed the breakout so I’ll wait for a potential flag even though I may risk missing the trade. I’d really like to see those indicators come down before I’d take a position. I’m also a little fearful of the market right now.