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ATPG, part V

Recs

16

January 11, 2011 – Comments (6) | RELATED TICKERS: ATPAQ

This is my fifth look at ATPG. Here are my previous posts:

- ATPG, part IV
- Natty: It's a Gas!, a Review of ATPG, and a look at SWN
- Analysis Update: ATPG and AMX (Feb 5)
- Analysis Update: ATPG and AMX

My last analysis was in the beginning of June while the stock was in a free fall. I saw that it was hitting some major support in the form of lateral resistance and a Fib retrace level.

I initiated a long position at the same time as the post (at about $8.50) and the subsequent bounce was very nice indeed. My projection was a move up to $13 dollar level and that is where I exited my position.

The move carried well beyond that and reached a high recently of about $18.50.

I am writing this post today because the move up to the $18.50 level coincides with a retrace of 62% of the Apr-June down move of last year and is also a touch of the downtrend line of all the major peaks since 2007. This should serve as some large resistance.

Maybe it breaks the downtrend line this time, maybe it doesn't. But the move up from the June low is very corrective looking and the last peak has occurred on highly negative divergence.

I have shorted and went long this stock several times successfully. I am not currently short, but will think about doing so if it breaks the trend line indicated on the second chart below.

Like I said in my last post, I am very bullish on this stock for the long term. But the recent up move is very corrective looking, and new bull markets in stocks don't start from corrections. However longer term, I would look for another move down to the $8.00 level, or (even better) the $6.00 level. If it does that again, it will complete an A-B-C correction off a previous impulse. That will be a buy it and forget it investment entry IMO.



ENLARGE




ENLARGE


Disclosure: No current position in ATPG, but entry thoughts are given above

6 Comments – Post Your Own

#1) On January 11, 2011 at 4:38 PM, Pennyperson (< 20) wrote:

1st Rec.

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#2) On January 11, 2011 at 4:53 PM, Momentum21 (41.20) wrote:

binve - what's with calling off the completion of the wave 5 I am expecting!?! : )

Once we hit 25 I give permission to go back to 6 so we can all re-load.  

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#3) On January 11, 2011 at 5:40 PM, binve (< 20) wrote:

Pennyperson,

Thanks

Momentum21,

Hey Momentum!

>>what's with calling off the completion of the wave 5 I am expecting!?! : )

Just being contrary as usual :) And then likely wrong (as usual) :)

>>Once we hit 25 I give permission to go back to 6 so we can all re-load. 

I will ask the market makers to get right on that :).

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#4) On January 11, 2011 at 6:31 PM, checklist34 (99.72) wrote:

i will read your other posts, so forget it if this is covered in them, but ...  anybody have a good analysis on ATPGs risks, updated for whatever changes in obama admin tantrums have hit the newswires?

 rec

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#5) On January 11, 2011 at 6:50 PM, Momentum21 (41.20) wrote:

this one is pretty good even though he has a long bias. 

Canadian Value/Devon Shire/swizzled  is another well-known long

And Porte is a big fan...as you know. 

Most risk has been surrounding the debt load and suspect management strategy. The moratorium therefore called their survival into question.

The stars seem to be aligning in their favor. Price of oil, strong output, natural gas deals, etc. Risk is still high but I think they remain a buyout candidate as well...probably not optimal value but providing a floor of sorts...perhaps 

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#6) On January 11, 2011 at 9:42 PM, nuf2bdangrus (< 20) wrote:

I have made some nice coin on this stock in the recent uptrend...but I sold ATM calls to hedge my position....I do not own it now but will on a pullback to 14...but I will sell calls.  There is enough volatility in this stock to sell ATM calls and pick up some nice premium.

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