JustWokeUp (50.39)

FRO jumps 11% in 5 days

June 18, 2008 – Comments (0) | RELATED TICKERS: FRO , GHM , NRP

Well, this one is interesting.

The stock is offering a tasty 15% dividend yield.

Its financial strength, cash flow, etc is healthy, so it is going to be a good long position.

This stock has moved up 11% in a mere 5 days - didn't it happen before in GHM, or NRP? Didn't this kind of story ends with a nasty pull back after the rally is over?

I am writing this one down so that I can always go back and either (a) bang my head on the wall for making such a stupid mistake, or (b) adore my uber-intelligence for making the right choice.

Here's what the stock is doing:

1. Strong support at 60, good resistance at 70 - currently it is testing this resistance

2. Double bottom (W) has formed and confirmed, but the last leg is created only in 2 days - is this healthy? If the last leg is 'healthy', then this is a very strong bullish signal.

3. Momentum is strong - no problem of running out of gas here.

So, should I sell my position?

With all my strength I control my emotion (fear of losing) and decide to hold on for long. After all, I am supposed to get a juicy 15% dividend only by holding this stock.

To all of you fellow CAPSers who hasn't bought FRO, now is the great time to buy. Seriously. :))