Long

Long-term Downtrend Broken?

Time will tell but it appears an almost 20-year downtrend/basing period has been broken. The breakout occurred with significant volume which makes it more likely to be genuine. Of course an initial shakeout/head fake could follow (and I may not have the trend line exactly right, tried to place it where there were the most hits, but a few times that resulted in false breakouts in the past). Anyway, long-term I like this stock. Fundamentally, can the company finally turn from years of losing money to profitability? Analysts estimate a profitable next quarter for the company. Will that happen? And can that profitability be maintained long-term? Those are the big fundamental questions for this stock.

Just some pretty simple observations, not advice, trade at your own risk.

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Encouraged by price action over the past quarter since my initial post, if this were a false breakout I would think it would have reversed back below the trend line by now. Price also appears to be trying to break out of short (from a long-term perspective) 3-4 month consolidation period.

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Still holding, nice day today after earnings. This is a pretty simple and obvious observation but if price can close on a monthly basis above that most recent high set late in 2019 in the low $8 range that would be good, but if it closes below the most recent low set early in 2020 just below $5 that would be bad. Currently pretty much right in the middle of those 2 critical levels. I'm holding out hope that the long-term pattern will win out in the end and that the better part of the past year has just been an initial shakeout I referenced could happen in my first post.

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(updated chart below) Price couldn't close above the higher downtrend line I have drawn and was turned away pretty significantly. I will add if it can make a monthly close above that line, which is right around the 200 month EMA. For now just holding and watching, appears more of that is in store for the time being.

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What a difference a month of price action can make. Last month price was forcefully turned away at long-term resistance, this month that action has completely reversed and if price can maintain the breakout through the close today I'll be adding to my position and a long-term rise may be just getting started.

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Added just over 25% of my cost basis to my position in this stock near the close today. My average in this stock before adding today was about $5.50 from buying a few different times over the past 5 years. My average after adding today is now close to $6 per share. I don't mind averaging up sometimes as I'm pretty confident in this long-term chart pattern and think a long-term rise may be just starting to get underway. There is also long-term momentum starting from mid-2017.

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Nice month of price action - sold off initially and tested the breakout of the trendline only to rally strong into month end and make a fresh high on a monthly closing basis. Price is initially reacting strongly to earnings report after the close today and momentum is in our favor at this point. I'm not going to set a stop loss just yet. I think this one may be just getting started on a long-term basis (hopefully).

(chart updated below)

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In the short-term I wouldn't be surprised at all to see this gap fill before it potentially heads even higher. I posted a shorter term chart below and highlighted gaps it made in the past. As you can see it usually fills the gap after a while. It doesn't have to necessarily but anyway it usually does.

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One more chart and then I'll stop commenting for a while. This one shows all available history of price action. I noticed RSI is getting overbought both on the short and long-term charts and was wondering if that's a problem. It could provide resistance; however, as you can see when the stock made a big run during the tech bubble, RSI crossed 70 and made it to the low 90s a couple times so it isn't necessarily a bad sign. In fact, I look at it as a good sign because this is the first time price has managed to get above 70 RSI on the monthly chart in over 2 decades!

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I just realized it technically hasn't broken 70 on RSI yet, price needs to maintain that through the end of the month to confirm but it would be a very good sign IMO if it can. Last month (July 2021) RSI closed at just over 65.

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Comment: Short-term price has mostly filled the gap from earnings at the beginning of this month. After this short-term action is over, I expect price will test the high it made of $10.75 on earnings and hopefully head even higher. Looks like RSI will not close above 70 this month after all, so still also waiting on that (would likely happen if price retests $10.75 and can maintain that price or higher through next month's end). Anyway, still holding, I'm starting to think about setting a stop loss but it still feels really early on the long-term chart and usually when I set a stop loss it mysteriously gets filled (which is why I like to use monthly closing prices so my "cards" are hidden), so I'm not setting one just yet.

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Pretty quiet, but overall down month. The short-term gap has been filled but this could take a few months to get going again. I don't feel like this has been enough of a shakeout to get people out that bought in when it started to take off in early August. A few more months would probably be enough with how short-sighted people are in general in today's society.

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Nice pop today on earnings, unfortunately now there is another short-term gap to fill just like from last earnings (again, it doesn't have to fill but usually eventually does).

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If price doesn't fall apart this afternoon, then RSI will close the month above 70 (on the monthly chart) for the first time since early 1999. I take that as a good sign. Yes, it is starting to get overbought and I need to be careful especially with how the overall market has been acting the past few trading days, but it could go on quite a run as you can see from what happened during the tech bubble around the turn of the millennium. Not sure what it will actually do but I'm hoping that history will repeat itself here, at least somewhat.

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Short-term it hasn't filled the gap yet from last earnings pop but I don't think it necessarily needs to this time. Last time price was breaking out to new highs (on a short-term basis) and filled that gap; however, this most recent gap is not new price action (it's basically already been filled by filling the last gap).

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2022 is setting up to potentially be a very good year for this stock, momentum is on our side; however there is some strong resistance to clear right around it's current level and a little higher.

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Short-term looks like it wants to fill the gap afterall following overall market lower. Long-term it's still in an uptrend. Earnings coming up again in a week.

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Big gap down on this earnings report after market close yesterday. I have to say I'm surprised because the last 2 earnings have gapped up. The first gap was eventually filled later and the second one actually hasn't been quite filled yet, even with this gap down, so there may be a little more downside and then I am hoping that this gap down eventually gets filled back to the upside this time.

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So far this year hasn't been as good as I was hoping for but it's rare to find a stock that goes up in a straight line. This looks like a natural shakeout so far but I think that price needs to find support around here or perhaps slightly lower where the 200-mo. & 50-mo. EMAs are getting close to converging (around $7.50 - $8.00). Recently had another nice short-term pop on earnings.

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Support held above the 200-mo. and 50-mo. EMAs but at the same time it hasn't made a new high yet. May retest the 200-mo. EMA if the overall market heads lower. but at least there's some cushion between current price and that now.. 50-mo. and 200-mo. EMAs are now getting very close to crossing.

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If the Golden Cross can happen on the long-term chart, I'll be looking for the 50-mo. EMA to provide support going forward. Over time the 50-mo. EMA could rise considerably above the 200-mo. EMA if price can stay elevated long enough.

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Encouraged by the price action in this stock. While the market overall looks like it wants to test the lows from a couple months ago, this stock is testing it's recent highs from the end of last year.

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Blasted right through recent high. If it goes through another shakeout I'll probably add to my position but I'm not selling because I don't want to miss out on the potential for an absolute blast off.

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Next resistance point is around $15. May have another shakeout from that point if it can get there, right now it's looking pretty strong and like it wants to test that level.

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Looks like earnings are coming up after market close on October 31. I wouldn't be surprised to see a gap down with how strong this stock has been lately. Either way, gap up or down I would expect that gap to eventually fill as it has every time the past few years. I may try to make a short-term trade depending on what happens while maintaining the bulk of my long-term position. Anyway, we'll see what happens and I'll provide an update in early November.

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Had some crazy price swings overnight reacting to earnings. I saw it initially get as high as $16, then overnight as low as close to $14, now it looks like it's only slightly down this morning, interested to see which way it goes today during normal market hours.

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Looks like it's going to head lower after all, no gap to take advantage of this time. I'll be looking to buy around $11-$12 if it has another shakeout to around that level, may drop as low as $10 even. I was hoping it could blast right through resistance around $15-$16 but suspected it might have another shakeout from that level.

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Just to be clear, I'm maintaining my position and haven't sold any shares yet. If it drops to the levels I recently mentioned I would consider buying more, definitely not selling because while it's had a nice short-term run, on the long-term chart it still looks like it might be just getting started. If we can get past what shouldn't actually be much resistance around $15-$16 then who knows how high it could go (could it eventually test the ATH near $160? I think that's certainly possible but would be very pleased with just a quarter of that that even, which would be around $40) That is, if this company isn't snapped up by a larger company first before it gets too expensive..

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Nice recovery to end the month, maybe it won't have much of a shakeout this time after all. While it would have been nice to pick up some more shares, I'm okay with that.

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May get that shakeout after all. I think 2023 could be similar to 2022 for this stock. If the Nasdaq breaks down and tests it's 200-mo. EMA in the first half of 2023, this stock would likely get dragged down with it and then hopefully have a good second half of the year and head to new highs. As I've already stated, I'm not selling any shares but will buy more if price gets a bit lower, probably would get to around $10 or maybe even a little lower if the Nasdaq tests it's 200-mo. EMA (I have another idea on here about that, check it out if interested).

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Long-term Golden Cross was confirmed after the October 2022 candle. Price has been consolidating a fairly wide range for the past few months since then. As I've stated before, it could still have a shakeout and test the 50-mo. EMA or it could continue to consolidate for a while. Either way, price should eventually be able to break above $16. If that happens the next support/resistance zone on the long-term chart is even wider at about $22 - $35 from a brief area of support when price was falling sharply in mid-2000.

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Just thinking here, if it can get to $30-35, I would probably sell some of my shares and look to buy back in the low 20s. My guess is price would consolidate a wide range for at least a few months IF that happens, so some short-term trading could be done with part of my position, selling some shares in the low 30s and buying back in the low 20s perhaps at least a few times, with maybe 25% of my position. At the same time it could blast right through that zone, so I want to maintain the bulk of my long-term position. Anyway, it's really hard to call what will actually happen but good to have a plan.

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Another exit strategy is whenever the masses catch on to this stock (thank you StockTwits - this stock is still very quiet on there).

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Stock's getting crushed after hours today from earnings report. I'll look to add to my long-term position if this starts another shakeout on the long-term chart and might try a short-term gap fill trade as well depending on where it opens at tomorrow, see my other updates about gaps in the past on the shorter term chart (it has, eventually, filled earnings gaps every time over the past few years, sometimes quickly within a week, other times longer weeks to a couple months).

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Added 10% of my position in this stock this morning on the gap down. Will look to potentially sell those shares between $15-$16. If the gap doesn't fill and this turns out to be the start of a shakeout, I'll add even more around $10 or a bit below. This morning's gap down is still in the consolidation range that it has been stuck in the past few months.

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Sold the short-term shares that I bought a couple days ago on a faster than normal gap fill. Gonna look to do more of these short-term trades along the long-term ride. I've been watching this stock for a while and have a pretty good feel for how it moves.

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For example, most quarters this stock gaps up or down pretty hard on earnings. If it gaps up, I'll trim 10% of my long-term position and buy those shares back on the gap fill and if it gaps down, I'll do what I just did this week, add 10% to my position and sell those shares on the gap fill. Each trade in itself isn't going to break the bank, but add up several over years of potentially holding this stock and those will start to add up.

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Stock currently looks like it's going to gap down again, not sure why this time.. May try another short-term gap fill trade if it holds until opening bell. (Also, I'm holding this stock in my Roth IRA, so don't have to worry about any taxes.)

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Gap mostly filled before open, so no trade happened today.

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Nice gap up today as I'm writing this morning before the open but I won't monkey with selling into that this time because the gap is due to winning the Charter deal which was a big ? for this company. This should help send this stock through the recent resistance it's had trouble getting through and on to the next level of resistance that I already talked about. If it does fill the short-term gap again I will add even more shares, I may consider adding up to 25% of my position because this is very good news.

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Thought about it some more.. the plan is to add 10% to my position if the gap from earlier this week fills. Want to hold some money back in case the general stock market (Nasdaq, S&P 500, Dow) tests 200-mo. EMAs which would likely drag this stock down further despite the great news earlier this week.

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Here's the next resistance zone I'm looking at. Price hasn't broken out of the consolidation yet but if it can, I think it can at least get to somewhere between 20-25 where it may find more resistance, then after that 30-35. However, this zone was a pretty short period, just a few months when it was falling like a knife after the tech bubble, so it may not prove to be much resistance compared to what it's been trying to break through recently.

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Nice gap up today on earnings. Price initially sold off after the open and has since made a nice intraday rally. I failed to accumulate more shares but I was only looking to add 10% to my position anyway. I got a little greedy waiting for price to completely fill the last gap up (it mostly did but I was holding out for another 50 cents or so per share). But I'm totally okay with that if it wants to head higher from here and break out of the consolidation that it's been stuck in for about half a year now.

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Disappointing pullback this month but I think it should be mostly over. It's possible that another shakeout or consolidation period could be starting that could last several months; however, I don't think that's likely right now since it just broke out of an approximately six-month consolidation last month and did so pretty convincingly. I still think that it will get to the low $20 range before another shakeout or consolidation occurs and will likely take some profits there, maybe 10-20% of my long-term position (plan is to buy back on a shakeout or do some short-term trading if another consolidation pattern forms). I'm not looking to add here on this month's red candle but I will if it goes through a more prolonged shakeout of potentially several months.

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Posted earnings after the close today, looks like the market is reacting very negatively so far according to Yahoo Finance. If that holds until the open tomorrow I'll look to add to my long-term position. It appears to be down so much right now that I'm considering adding 20-25% to my position. I think I'll hold those shares for more than just a potential gap fill this time, will be looking to sell them in the low $20 range as I've previously mentioned. Anyway, I'm not able to trade after hours, so I'll reassess in the morning at the open if it's still down big then.

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Added 20% to my position just after the open. With that said, this stock could be headed even lower to it's 50-mo. EMA (currently just over ) or even 200-mo. EMA (currently ); however, I think it would be more likely to find support at the 50-mo. EMA, if it gets there. I may take some profits on a gap fill since it's so large this time but I also might get greedy and hold for the low $20 range (however, at the moment that seems miles away due to this large gap down).

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Added another 10% at the 50-mo. EMA

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Keeping some back to add even more if it gets to the 200-mo. EMA, which certainly could happen at this point, that's not even 2/share away atm.

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Unfortunately I didn't add at the 200-mo. EMA (had a limit order entered right at it but missed out executing by just over a dime per share). This further supports my belief in not having open orders in general because I don't like the fact that market makers can "see my cards". Anyway, despite that I still have a significant position in this stock. Nice reaction to yesterday's earnings report, hopefully this momentum can continue and at least fill the large gap down from the previous earnings (see most recent chart I posted). I will probably take some profits there but will reassess at that time, IF it can get back up around $15.

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Increased my shares by 10% this morning on the selloff due to the news of a change in CEO. I don't see why it should sell off so much on this news as the board is confident in the successor, so I'll take the short-term discount created by the uncertainty. I'm still hoping it can eventually recover to around $15-16/share where I would probably take some profits while maintaining most of my long-term position.

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Getting close to the 200-mo. EMA again (a re-test is not a good sign after finding support about 6 months ago just above it). I'll probably add some more shares if it falls a bit further to ~9/share but hold some back in case it falls even further as this drop was started due to the news of a change in CEO. The market doesn't like the uncertainty surrounding this situation but that creates opportunity to buy at lower prices, even though it doesn't feel very good.

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It's close enough to the 200-mo. EMA here I would add more shares if I could. Need to free up some more cash first personally, I might not be able to add until next week if it can hang around the 200-mo. EMA until then.

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Nice gap up today on earnings. I'm certainly no expert but Needham has reiterated their Buy rating and maintains a price target of $18. I'm ok with missing out on buying shares near the 200-mo. EMA (again...) because I was only going to add 10% to my shares anyway, so I'm personally not missing out on much.

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It actually found support last month right at the 50-mo. EMA on a closing basis (this is good despite testing the 200-mo. EMA again). Hopefully the worst is over in the short-term...

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Finally filled the gap from nearly a year ago due to strong positive reaction to earnings this morning. I should have taken some profits on the shares I bought over the past year but I didn't check my portfolio until just now and it has already retreated from $15 to $14. It should get back to at least $15 again, so I'm going to be greedy and wait for that price level again before taking some profits. Hoping it can eventually test the recent high from May/June 2023 and break through that (today's action is a significant step in that direction).

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Still hasn't gotten back to 15/share yet since it did briefly the morning after last earnings report, so my plan now is to not take any profits if it can get back to $15 and wait for next earnings report (coming up in just over a month). Hopefully it gaps up again and I would take some profits there (I'll try to pay closer attention this time). Then I would buy those shares back on a potential partial gap fill (maybe half of the gap up to 2/3, but I will not have an open order for that since those mysteriously seem to get avoided; I just don't like having to pay so much attention to it; and if the gap doesn't fill at all oh well, I would continue to hold the bulk of my position and need to start exiting at some point anyway).

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Obviously not the reaction I was hoping for to yesterday's earnings report. I have already bought at the prices it dropped to this morning, so I didn't add. Will continue to hold but not looking good again, at least short-term.

PatientContrarian

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