ARBA, the good, the bad, and the ugly
Alright, it is now "later" and I have re-looked at my picks, well one of them at least. As you probably already know from reading early I went out onna limb and picked up 1,000 shares of ARBA today around 3:10 PM. The buy was a clutch purchase for the intra-day patterns it was showing throughout the day and I got a steal on the price. The good news is that the stock closed at $6.89, about $.05 higher than where I bought it, showing about $50 in gains to my portfolio. The stock had met all my pre-limb quick observations based onna technical and original search looks. But, I had overlooked some fine details that I shouldn't have and I will relay the bad and the ugly that this stock may reflect in the upcoming day or few days.
1. Upon looking again at the company statistics I noticed the company has had a reverse split in the last year, not a good sign. Though this isn't too big for my short term play it still reflects a company that is in some long term trouble. To add to it the company is trading below the price after the reverse split and has tested its 52 week low; a bearish sign.
2. The company has a short % of 10.26% (this is as of March 8, 05). This isn't necessarily bad because the stock has run up recently (most likely a pump and dump) but the stock did show an increase to the short # of over a million. What will make this factor bad or not is the April figures which will actually be availble through Nasdaq on Wednesday. If the number has increased again up from March 8th to April 8th that could mean bad news; another bearish sign.
3. I went digging after I had bought the stock to find out why it had run up and ran down so fast(the extra volatility in the past week). Apparently, the company ran up pre-earnings then posted bad earnings. The company also got downgraded by CIBC Wrld Mkts and RBC Capital Mkts on Friday. This basically puts the PPS (Price Per Share) most likely back to or lower than the price it was at before the (in my opinion artificial) run up.
4. I overlooked the fact that the company (from a technical reading) has been opening on gap ups and downs. There has been four days inna row with the stock opening up on a gap one way or the other. Yes, this can be good, but with a company that is already not in so sound financial shape this could be bad news and doesn't allow me to limit my losses if a quick gap down occurs at 9:30 AM tomorrow.
Now, taking all of this in some lessons and can be drawn and changes have to be made accordingly. The stock did show accumulation throughout the day today reacting from the big downward move from Friday. This is bullish and what we are looking for is to ride the quick bounce the stock will take, hopefully. The stock closed strong and some big block shares were purchased in the closing seconds which is good (big relative to the intra-day patterns, these blocks were about 14,000 shares each; two total). What I am going to look for tomorrow is a natural reaction to the downtrend and a nice "strong" day. With the intra-day patterns shown and the closing volume I have reason to believe we could see a price over $7 tomorrow. My 1st target price is $7, my second target price is $7.20, and my third target price is $7.50. If the stock sits tomorrow I will most likely walk away without any worries on my shoulder and go back to the drawing board. I am in a good position holding a small amount of shares and it should be easy to sneak my order in if need be. One final technical fact was that the volume was lower than the avg (50-day average) which you usually do not see the day after a heavy drop. So tomorrow morning I hope to see some early birds give the price a nice jump and a nice open, otherwise it will be close watching for Ariba Inc. Have a great night.
To the future,
1. Upon looking again at the company statistics I noticed the company has had a reverse split in the last year, not a good sign. Though this isn't too big for my short term play it still reflects a company that is in some long term trouble. To add to it the company is trading below the price after the reverse split and has tested its 52 week low; a bearish sign.
2. The company has a short % of 10.26% (this is as of March 8, 05). This isn't necessarily bad because the stock has run up recently (most likely a pump and dump) but the stock did show an increase to the short # of over a million. What will make this factor bad or not is the April figures which will actually be availble through Nasdaq on Wednesday. If the number has increased again up from March 8th to April 8th that could mean bad news; another bearish sign.
3. I went digging after I had bought the stock to find out why it had run up and ran down so fast(the extra volatility in the past week). Apparently, the company ran up pre-earnings then posted bad earnings. The company also got downgraded by CIBC Wrld Mkts and RBC Capital Mkts on Friday. This basically puts the PPS (Price Per Share) most likely back to or lower than the price it was at before the (in my opinion artificial) run up.
4. I overlooked the fact that the company (from a technical reading) has been opening on gap ups and downs. There has been four days inna row with the stock opening up on a gap one way or the other. Yes, this can be good, but with a company that is already not in so sound financial shape this could be bad news and doesn't allow me to limit my losses if a quick gap down occurs at 9:30 AM tomorrow.
Now, taking all of this in some lessons and can be drawn and changes have to be made accordingly. The stock did show accumulation throughout the day today reacting from the big downward move from Friday. This is bullish and what we are looking for is to ride the quick bounce the stock will take, hopefully. The stock closed strong and some big block shares were purchased in the closing seconds which is good (big relative to the intra-day patterns, these blocks were about 14,000 shares each; two total). What I am going to look for tomorrow is a natural reaction to the downtrend and a nice "strong" day. With the intra-day patterns shown and the closing volume I have reason to believe we could see a price over $7 tomorrow. My 1st target price is $7, my second target price is $7.20, and my third target price is $7.50. If the stock sits tomorrow I will most likely walk away without any worries on my shoulder and go back to the drawing board. I am in a good position holding a small amount of shares and it should be easy to sneak my order in if need be. One final technical fact was that the volume was lower than the avg (50-day average) which you usually do not see the day after a heavy drop. So tomorrow morning I hope to see some early birds give the price a nice jump and a nice open, otherwise it will be close watching for Ariba Inc. Have a great night.
To the future,
posted by Blain Reinkensmeyer at
10:23 PM
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