That much is certain…when, now that is the question.
I have a hard time believing that a company that reported such fantastic results could be destined for lower prices in the coming quarter. Granted, I am far from a reliable source of analysis when it comes to understanding company financials, but I am smart enough to know that what $SWHC brought to the table historically leads an increase in shareholder equity.
With that said, let’s focus on an area in which I have a much higher degree of confidence: chart chomping. First, the $SWHC daily and weekly:
Let’s take a look at the longer term perspective first. On both the daily and weekly, 11 has served as an area of resistance since the break higher in early September. Note that on the initial push to 11, there was a tremendous gap which eventually filled in early November. Therefore we can, for the most part, eliminate the need for price to come back and find that area again.
The reversal on Friday was the third time in a month that shareholders of $SWHC failed to get through 11 with any sort of confidence…as most of you are well aware, price was once again rejected…this time with extreme prejudice.
Even in a stock known for some chaotic moves, Friday’s ‘quaint’ action was pretty fucking crazy. Watching things unfold defied logic.
I purchased some December 11 calls right before the close on Thursday for a pure earnings gamble. Having followed the tales of $SWHC here on iBC, I was fairly confident in their ability to beat…so this wasn’t a purely degenerate play (see $MRVL earlier in the year). Nevertheless, I was incredulous as price started to crater early in the day…so I did what any sane person would do: immediately double my position at half the cost from the previous day.
In hindsight, I probably should have thought that one out a little bit more…I succumb to emotion at times.
Now that there has been such a violent reversal at 11, it would appear on both timeframes that price still has some room to come in. If that is the case, in the the short term, I’d like to see the panic abate in the area between 9.75 and 9.25.
My opinion of the “worst case” scenario for people who are currently long and nervous? The selling continues and price craters into the mid to low 8′s. I use quotes, because if price retreats to this level, this will present a buying opportunity that we will eventually tell our children’s children about.
I may go “full retard” margin on $SWHC if it retreats to 8.50. Look, I believe that is a fucking home run waiting to happen.
If you are one of the nervous longs, I would prepare myself for a little more selling in the coming days. This kind of shit typically doesn’t resolve in a -8.5% +9.5% +5% kind of manner, you know?
Be patient, the time will come to unload your coffers in order to fill your gun safe(s) with coin, or whatever the fuck you want to put in there.
I’ll continue to broadcast my thoughts on this matter as the situation develops.
My best to you all.