posted
hey all, I would like to hear your opinion on SUF. It dropped HARD this week, from about $19 (friday) to $6.88 (yesterday's close) I've seen other stocks drop this hard and they usually go up again for a short time, making it easy to make a quick buck. If it pulls back in, say, the first half hour of today's trading session (lots of trading happening THEN, compared to the overall trading activity throughout the day), would it be safe to buy and then immediately sell in a bounce, or do you think the risk is too high for this one. The reason I'm asking is that I watched it yesterday, and it was VERY volatile.
posted
some info on the whys of it, bet it will keep going up for another day or two, no cash to put my money where my mouth is though...
By Rob Lenihan TheStreet.com Staff Reporter 1/24/2006 2:05 PM EST
SulphCo (SUF:Amex - news - research - Cramer's Take) said a weekend Barron's article that questioned whether it will be able to find customers for its technology "is materially misleading regarding the company, its management and its technology." The stock tanked after the article ran, and the Nevada-based company's defense did nothing to stop the selloff. SulphCo has designed a process meant to upgrade sour heavy crude oils into sweeter, lighter crudes. Shares of SulphCo on Tuesday dropped $3.11, or 30.3%, to $7.14 in extremely heavy trading.
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Have you posted this on the Nas board? I think you should put it there too. I got in at 8.14 and very happy right now. Thanks for the tip!
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posted
yes i think so. this is in a strong reversal bounce imo. ive been reading a lot of other boards and there are a lot of strong longs, so i would be surprised to see a huge sell off any time soon. of-course there will be red days, just how significant is the question.
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I think that there are no gaps to fill from the first steady climb up and that this has potential to get close to where it was before. Not saying that I'll hold that long, but it definitely has potential.
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wow... you see, I was reading the GTE board on Yahoo.com one day and this GTE basher mentioned SUF (BEFORE the big fall he advised everyone to sell GTE and buy SUF). Everyone seemed to ignore him of course because he was obviously a basher who was trying to scare people into selling so he could buy his shares cheap, but I kept SUF on my watch list. I saw it drop like a rock and thought I'd mention it here, and since then ($6.88) it went up to as high as 11.43 today (I can't believe I posted a stock that went up 65%!) so I'm happy to hear some of you made money on it! I didn't get in though... I wasn't sure if this was a safe buy
As a newbie I wonder, is buying after a huge fall (like we saw here with suf) USUALLY a safe buy? I've seen a few stocks like this drop and then "correct" to the upside for a short time... it seems like one of the trading strategies to use but I would like to hear you guys/ladies' opinions
Thanks!
Happy trading all! and have a great weekend
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posted
Ope, Panic sells are always a good buy in time. Wasn't this a panic sell off? Cramer mentioned it badly? Panic sell, all stocks bounce from a panic sell.
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quote:Originally posted by Jelly: Ope, Panic sells are always a good buy in time. Wasn't this a panic sell off? Cramer mentioned it badly? Panic sell, all stocks bounce from a panic sell.
How do you know which are panic sells and which are legitimate?
If you look at ITEK, it would appear the selling that went on today was either profit taking or panic, yet in reality it was legit. Many including myself misunderstood the news that came out and thought we were getting in low and that when Cuban's company took over the price would be .68 a share, problem was that would be after the RS so it actually would be .068 big difference. Stock skyrocketed then plunged today. I was lucky and found an article explaining it and got out in time. Stock is still very high and IMO not a good value but it fits the pattern talked about here.
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Hey Wally, because a panic sell is usually *related to news* of some how. I BELIEVE that SUF was mentioned by Cramer as a not so great stock, so people panic sold, GREAT buy in opp to make cash.
Not sure if you watched GZFX a few weeks back. They had a PR that they were extended their pilot program, a panic sell hit HARD. People didn't want to wait til March, BIG Buy opp there too.
Usually when you see a sell off, like it looks like you ITEK had, without news, it could be the emotional traders selling off, taking profits, or MM manipulation. It's a tough one to call. I didn't watch that one.
posted
Thanks Jelly. So much to learn. It seems information on these penny stocks is limited. Currently using small cap center, pink sheets and obb because Yahoo, MSN and the larger popular sites don't follow them. I guess it's like digging for gold. if you keep at it you could find some.
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I would like to share my opinion on Sulphco since I have done much research in regard to this stock. Plus, this stock has a lot of lessons to learn from.
I bought this stock at $2.50 in July, but I did an incredible amount of research before doing so. First off, my investment strategy consists of 4 to 5 long term trades (over a year, I really hate losing 28% of my profit to the gov't), and probably on the average of 4 day trades a month. Both of my strategies are based on research, I never buy on "panic sell" (unless I see a long term profit, once again based on research) or a hot tip. That has too much risk and very little reward for me. I actually have a friend who uses this strategy, but he grosses on average, 20,000 to 30,000 a year. That barely covers the cost of living where I am from and then he gives a large sum of it back in taxes. Why did this stock plummet? Well, it seems that someone shorted the stock on a grand scale and they shorted it long before the Barron's article came out. A hedge fund no less (these are inherently evil, but can actually be your friend once they move large amounts of capital into your heavily researched stock). Why was it shorted? Someone knew in advance that the Barron's article was going to crush this stock and so the ensuing panic sell off occurred. (For more informantion on shorting and it's effect on stocks google "overstock.com short positions", this will show you the cutthroat world behind stocks, plus it is somewhat amusing) Did I sell? NO WAY! (I'll explain later) Not only did the person know the panic was going to incur, their short position was going to make them a very good profit. I followed the movement of the stock all day on Friday, (which I kind of regret because I knew CHNR was going to make a huge move and I wanted to get in at 11 and get out at 13), but I knew SUF was going to have a more interesting day so I opted to watch it instead. Notice how everyone jumped in to push it to 11.43. That was the apparent trigger for alot of day traders, swing traders, to lock in their profits for a very successful 1,2,3 day run. Also, I suspect some daytraders who bought in at over 11 wanted to cut their losses as they felt they came to the party too late. The volume absolutely died at the end of the day on Friday, then it became a cat mouse game between daytraders attempting to lock in small profits (10.4 to 10.9) I have a feeling they weren't successful as somebody (I suspect the hedge fund, but I can't confirm) kept pulling the trigger at 10.5, then they would let it grow to 10.9 (to regain trust and momentum) and repeat the same cashing out scheme. This led to frustration and many of the daytraders who got in at 10.20 - 10.25 wanted to close their positions so they could start their weekend without worries. Monday is a different story, it will be interesting to see where this one goes. I am going to watch it again, because I understand the psychology of Friday and want to see the impact on Monday. I am in no way condoning this as a possible monday day trade!!!! I have no idea where this one is going on Monday!! (Investors are still trying to come to grips on why Barron's put out this discrediting article while the web is filled with reports from Robert H.C. van Maasdijk (Sulpcho) attempting to perform damage control, remember the company itself is heavily invested in the stock and they don't want to see it drop 14 points! ) I am not concerned as I am holding this position for probably well over a year. About the pattern: I call this one an overnighter (traders place their position after the bell to capture the late day fall to 10.46 (using friday as an example) to cash out when the stock makes a run) These are great since they don't qualify as a day trade, many people use this strategy to get past the SEC rules concerning day trades. This one shows the "overnighter" pattern, but this pattern will change because everyone is becoming aware of it. Unfortunately, once a stock does this a couple of times and too many people attempt it, this makes the stock too hot to handle, in other words, instead of the stock dipping at the end of the day where some clever people get in to ride the wave, the stock will unusually rise at the end of the day in a pattern change and confuse the folks who got in at this time. Others will interpret the stock as one that is about to move up again and jump in. This usually causes erratic behavior, one point gain, one point loss, one point gain, 3 point gain, 4 point loss. I for one would not risk my capital in this environment, but you can make a ton of cash if you time the dips just right. You can also lose a ton of money if the bid in the queue just before you is cashing out for the day (remember when some people cash out, they cash out big!). Look at the poor soul who bought in at 11.43 on Friday, I hope he/she is going long with their position. All in all, Monday is going to be very interesting, I for one will watch it all day, but then move on to research other possibilities on Tuesday.
Now why do I think this is great long term investment? Because simply put, this company has amazing technology that counteracts the effects of peak oil. If you are not familiar with "peak oil" google it. Currently, there are constraints on the supply of sweet crude (the perferred stuff used for gasoline), I think we are all aware of this (gas going up to $2.49 and not coming down is a big clue). Nigeria is one place where the US gets a large percentage of it's sweet crude, but unfortunately some tribes in this area don't feel their cut on the profits is enough and are causing disruptions. Not on the scale of Iraq, but it is enough to cause panic on IPE and NYMEX. Also, we were getting a steady supply of refined gas from France after Katrina and Rita hit, plus, emptying the strategic petroleum supply from our own reserves. This is why gas in my area cooled off and went back to $2.10 it should have been similar for your area as well. Well, France is done lending crude to us and now we are back to $2.49 in my area. Now factor in Iran's relations with the US, Iraq (enough said), China and India's newfound thirst for oil and you can see where I am heading with supply constraints. The NYMEX and IPE are going to be volatile for a while. There are millions of investors out there attempting to capitilize on what will be our next energy supply, alternative energies are far from being implemented as this will take large amounts of investment and infrastructure changes, plus as scary as this might sound, none are close to comparison in terms of the energy produced in relation to energy invested. Sulphco has proven technology that can actually transform heavy crude into sweet crude, this will counteract the constraints (it is widely believed that sweet crude is peaking, i.e. production will not grow in the future, production will plateau, then decline) What is even more alarming is that heavy crude will eventually decline in the future, some estimates believe this will occur in 2009-2015. Once again, Sulphco is counteracting these constraints with proven technology that increases the actual oil produced by 20% to 40% percent. This means less heavy crude will be used to create light sweet crude. Now when you invest long term you must think long term. Am I getting in too late? Using Sulphco as example, no, because they actually haven't sold their technology on a grand scale as of yet. Will they be profitable? Umm, YES!, oil companies are flush with cash and are not currently reinvesting it for refineries or to increase their reserves, they are actually enjoying the current supply constraint, but will eventually need to look to the future or they will not have product for their customers. The only investment taking place is mergers (example, ConocoPhilips bought Burlington Resources, remember the CNOOC bid by China), this is not a good sign as oil companies actually must merge with others to increase their supply. Plus in terms of profitability, Sulphco will be selling their technology for $5 million a pop, not too shabby considering their production costs are very minimal in relation to potential profits. Compare that to Microsoft who just rolled out xbox 360 (yes, they won a large percentage of market share in the gaming industry, but they actually lost upwards of $500 every xbox sold!, why? price of oil I bet) Do they have competitors? Not at this time, but this is something you have to watch out for. You must do your homework every week on the web and search out possible competitors. What could go wrong? I have ruled out an oil glut (think of the 90's) as killing this stock, this technology will still be sought after. Oil companies need more oil. If you guys can think of any possible bad scenarios please let me know, remember there is always something you can learn from others. I constantly review my choices with colleagues. Somebody might have a perspective that you didn't at first see!
Lastly, when taking a long term investing approach there will be ups and downs, but if you do your homework and stay focused on your research it really pays off. Trust me, when I sold my tech stocks in the late nineties, I took 2 years off and I am about to do the same when I sell my oil/gold mining stocks! Sorry about the long rant, I feel the lessons that can be learned in the behavior of this one stock will be helpful for those who want to understand the psychology of day trading and the strategies of long term investment.
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Wow! Shot up to 11.55 and here comes the big sell off down to 11.05, then back up to 11.25. Like a rollcoaster. I wonder if it will settle down.
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Finally! The stock died all day and finally dropped into the low 10's. Might have a big overnight/morning bounce. I got my low 10! I can't believe the stock made me watch it all day.
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Im thinking of jumping in again, do you guys think it will slowly go down to the 8.00 range again as the week progresses....or do you think it is stuck at 10.00....
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