The market's in limbo today thanks to Citi's disappointing numbers, but another dip in jobless claims. With the broad market on the fence, it's time to dig deeper to find the best of the best when it comes to trading opportunities. Samson Oil & Gas Limited (SSN), Biomoda, Inc. (OTC:BMOD), Sterling Financial Corp. (STSA), and Linktone Ltd. (LTON) are among that group today. Here's a closer look at each.
Actually, this look at
Sterling Financial Corp. (STSA) financial today is more of a closure of previous call on the stock rather than the opening of a can of worms. Our expectation - a bearish one - was right on target.... and we couldn't be more frustrated about it.
Say what? Back on
October 1st we noted that Sterling Financial shares had broken under a key support level at $1.95, moving to $1.87 that day. That was the beginning of a breakdown; we were targeting a move to as low as $1.00 from STSA. Now, we're not so sure.
The 20% plunge from Sterling Financial today has pulled the stock down to $1.34... a 28% gain for anybody who shorted the stock from our tip. So what's the complaint? After a 20% dip, the odds of a sympathy rebound are raised. Had the stock just walked down at a steady pace, hitting $1.00 would have been a snap. Now, the drastic pullback wrecked a perfectly good downtrend.
Bottom line? Cover the short trade and lock in your gain, or at least put a super-tight stop in place for STSA.
This is on no way a judgment call on the company's merits, but we think
Samson Oil & Gas Limited (SSN) is a speculative buy now.
The chart below is a great example of a range-bound stock, particularly with the lower/support side. Samson Oil & Gas Limited has quite consistently pushed off a horizontal floor at $0.32 since November of last year. Though not as precise, SSN has also halted those rallies around a ceiling of $0.68. Based on the history, the odds are high that the pattern will repeat itself again, now that we've seen an upside reversal at $0.32.
No, it's not likely to be a huge win if Samson Oil & Gas move from the current price of $0.40 to the $0.68-ish area. Given the low risk and short time needed to reap that gain though, we'd saw SSN still has an optimal risk/reward ratio.
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Congratulations to anyone who owned
Linktone Ltd. (LTON) before this morning.... now sell your shares and pocket the money.
Seriously, we don't see this strength lasting trough tomorrow. In fact, Linktone is already fading from today's highs. One could make the argument that LTON is at the beginning of a breakout, based on the massive inflow of volume. This stock has not performed well after similar breakout attempts though, so we expect nothing different his time.
Yes, the news was encouraging, but investors will figure out soon enough that an 'agreement' doesn't drive revenue. And, if this one does, it just got priced into Linktone share price - there's not any real room left for more appreciation. It stinks, but investors have been forced to put on a trader's hat after today's ridiculous pop from LTON.
And finally, a look at
Biomoda, Inc. (BMOD) is deserved not because the stock is making a big splash, but because the trading community is buzzing about it. That buzz is often an omen of something really exciting around the corner.
That said, there are a couple of noteworthy bullish, technical items to mention about Biomoda, like support at $0.23, and the way a short-term falling resistance line was broken last week. And, though there appears to be something of a glass ceiling at $0.27, BMOD shares have been closing at the upper end of the daily range over the last week and a half. It's a subtle sign that traders would rather own it overnight rather than not own it.
As for any upside, we'll only project a breakout to run up to $0.40 for the time being, which has been the high trade except for the August 24th peak price of $0.53 (which doesn't hold a lot of weight considering BMOD didn't even retain that gain for that day). Still, a move from $0.26 to $0.40 ain't bad, and it lets you into a position on the off chance the stock manages to blow past that ceiling.
If you'd like to know of any changes in our opinion of LTON, STSA, SSN, or BMOD (or if we officially recommend them as trades), be
sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.
