Small Cap Stock Getting Large Cap Attention on CNN
When’s the last time you saw a bulletin board stock get featured on CNN? I’m sure it’s happened before, though I can’t remember when. More important to us though was the stock in question…. it was our very own China Energy Recovery (OTCBB: CGYV). The company was the focal point for a two-minute clip regarding potential clean energy initiatives here in the United States. Roger Ballentine, a former Clinton advisor and a current member of China Energy’s board, was representing the company.
If you missed the original airing, don’t worry - there’s a clip available here on the CNN website. A short advertisement plays first, then the fearture starts up.
There was nothing particularly new in the clip for us; the point here is how this two minutes was a very important two minutes for the stock. CNN has an audience most companies can only dream about. Tell a good story to a large, profit-hungry audience, and the result is lots of focused eyes and ears. That’s what’s behind today’s 10% pop, though I think more will trickle in over the next few days.
The best part about publicity, however, is how it garners more publicity. I wouldn’t be shocked to see China Energy featured somewhere similar in the near future, once again in a forum usually reserved for the biggest of the big companies.
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We have a “soft seller” in there with us longs each and every day. I see him clearly and have since the third week in December. BUT, since 12/15/08, starting at 1.32’s intraday low, we’ve been in an undeniable uptrend. Additionally, with this guy selling we’ve managed to “step up” and make forward progress most days with the volume increasing. Given this premise, and to temper my possibly rose colored glasses, would you say that this stock is definitely being accumulated MORESO than ever? I’m thinking BECAUSE there is a seller and BECAUSE we’ve gone forward while he unloads that this is bullish to say the least. Did I make of that question? I’m asking if you agree that the stock looks more bullish technically and otherwise than at any proceeding time. Yeah…that’s what I’m asking (man I’m long winded)
Editor’s response: Accumulated? Yes. More so than ever? No.
The behavior is good, but I still see some vulnerability even above and beyond the lone seller (though I don’t know for sure that it’s a solo effort on the sell side). However, the odds seem to favor the bulls here. I’d say the odds are 2 to 1 in favor of the bulls. Every day we advance futher improves the odds. Past $2.25, I’d say the odds are 3 to 1.
Odds of what though? A decent move….at least to $3.00, but maybe even $4.00. Getting beyond there may be possible, though I think past $4.00 the case for CGYV gets very tough to fundamentally justify yet. They’d need to add capacity to (which they already have once) to bolster a move above $4.00. IMHO.
Comment by Lewis — 1/11/2009 @ 9:09 am
If you receive any reports from the transfer agent, could you let us know if there is a new hedge fund taking his position off the table? Following up on my previous blog, that rally got clobbered mostly by one seller as indicated by the time and sales and market maker id on level 2. I could be wrong, but I’ve been tracking it (kind of geeky, I know) for days/weeks now. Same guy. Thx in advance.
Editor’s response: If we hear of anything like that, we’ll let you know. Unfortunately, we rarely hear of that kind of stuff (despite our relative ‘in the know’ status) until about the same time everyone else knows.
Comment by Lewis — 1/2/2009 @ 2:08 pm
Here we are today, 1/2/09, rallying for three days on average volume without news 1.60- 2.09(intraday). Is this a sellable rally or do you think it has legs? It’s so hard to call without decent volume. Thanks for your input, Sir.
Editor’s response: Sorry it tool a while to get back to you….a few hours too late, it looks like. To answer your question though, yeah, it’s a sellable rally, AND it has legs.
We do think CGYV is finally getting up and running on its own, but I don’t think it’s going to make a beeline for $6.00. We’ll probably see several of these two-steps-forward and one-step-back moves for a while. Each is a profit-taking opportunity, and I wouldn’t hesitate to take some (though not all) profits when the chance came along. Likewise, I’d buy on the dips. Eventually we’ll work our way up to $6.00, if all goes as expected.
Comment by Lewis — 1/2/2009 @ 1:45 pm
Looking at the SEC filed S-1 for CER, I see numerous hedge fund investors. We already know one went belly up. Does management have a plan in place in case of another fund with CGYV shares goes under? Perhaps, buyers in the wings to prevent a distressed sale by the bank/fund? An unusual question but these are unusual times…
Editor’s response: To my knowledge there’s no contingency plan in place like that; I’m not sure there’s anything that can be done to alleviate the effect. That’d be nice if there was though, wouldn’t it? I think if there were a lot more buyers waiting in the wings, they would have bought in by now. I think CGYV will have to attract buyers the old fashioned way…. by earning them.
Comment by Lewis — 12/19/2008 @ 8:31 am