If you're looking for a winning trade before it becomes a winner rather than after the fact (when the media usually starts to tout a story), then put Gevo, Inc. (NASDAQ:GEVO) on your radar. No, it's not even close to being a household name, but GEVO may be offering one of the market's best risk/reward scenarios available right now.
If the name and ticker ring a bell, it may be because yours-truly penned some bullish thoughts about GEVO back on March 20th. The gist of my message then was simple.... the stock needed to fall back and fill in a gap in the short run, but in the long run had already revealed that it was working its way into a bullish trend. Well, that trend has further solidified since then.
Gevo, Inc. did end up giving us that pullback, filling in the gap in the process. Take a look at what happened just a few days after that, however. Once a long-term rising support line (red) was brushed, the bulls stepped in again and started to buy, pushing GEVO back above its 20-day and 50-day moving average lines.
When you take a step back and look at the bigger picture though, something more important stands out - the new uptrend is still intact.
Critics will be quick to point out that this daily chart of Gevo, Inc. is still showing us lower highs (since February's peak). And, they would be right. The fans of the company, however, would be just as quick to point out that on this weekly chart, there's been an uptrend in place since late last year, and that GEVO shares are now well-supported by the 100-day (20-week) moving average line.
Translation: The bulls have more going for them right now than the bears. Traders mulling a position can take some comfort in knowing the undertow now favors a bullish move.
Gevo, Inc. is al alternative fuel maker. It's developing a technology that allows ethanol production plants to converts cullulosic biomass (plants) into isobutanol, which is a building block for several types of liquid fuels that can serve as an alternative to petroleum-based fuels. In other words, GEVO can make 100% renewable liquid fuels. The technology itself is ready to use, but the company is still trying to convince ethanol producers that cellulosic biomass is the way to go. Some have nibbled on the idea, and it looks like Gevo is starting to get some traction with more producers. That's why the stock's perked up of late. Thing is, the company has yet to hit its full stride. As it accelerates to full operating and sales speed, the stock should reflect that more and more. Time to wade in.
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