Double Journey

Wow, what a ride. I honestly didn’t think I would be in and out of this stock so quickly, but that’s what happens when you play in the small cap space. So overall, this was a pretty bad trade for me. Jamba opened higher but then traded down all day on pretty much no news, but the bears were firmly in control.

I actually didn’t check on the stock until it was down around $4.90 today. I should have sold there, but I was waiting for a better price. It didn’t happen. Like I predicted, as soon as it broke through its support it was straight downhill from there. Good to know I was right, but bad because I didn’t get out of the stock in time. Truth be told, I did not think that the stock would hit my stop loss point in one day, but it did. At $4.54, my stop loss executed, netting me a 10% loss in just under two days. Yikes! Lesson learned.

So that means I took a loss, including commissions of $243.42. Kind of painful.  Probably won’t trade rest of week and remain in cash.  I’m on my way down to California to start a new job.  Wish me luck.

Jamba was doing OK until the Fed decided to piss off the market. It opened up sharply and touched $5.60 but it pulled back. Jamba was hovering slightly negative for the day, around $5.20, until the Fed announcement. It then bounced up and down for the rest of the day between that and it’s support at $5.00. It broke through the support slightly, and settled at $5.05.

Now I still think that Jamba could easily go up from here since I really don’t think the Fed has anything to do with this stock, and as people realize it, it could continue on its way up. However, it is flirting with going under its level of support, and if it does, watch out below. Tim Sykes, another blogger I read, has even decided to short the stock. I don’t necessarily disagree with him, and actually think his logic is pretty sound. He is saying the same thing I am. If Jamba falls below its support, it is going to go down to it’s next level of support, right around $4.50.

I bought at $5.03, he shorted at $5.04. One of us will be right, it will be interesting to see which one

So Jamba closed at $5.30 today. I bought at $5.03 at 11:55 a.m. which just so happens to be where the stock bounced on its way back up. So excellent, albeit lucky, timing on my part. That means if I would have sold on the close, I would have netted a cool 5% in just one hour. Including commissions, I would have made about $114. Of course that is irrelevant since I didn’t sell, and I won’t unless it breaks back through its resistance line.

I want to go into a little more depth into why I decided to buy where I bought so hopefully we can all learn from this. I think Jamba is on its way up, and up significantly, and wish to give you the technical reasons why. Here is the one month chart on Jamba.

The news on the Nestle deal came out on December 4th, and you can see the rather large spike in Volume there. The stock shot up to $4.50 that day, but then pulled back to close at the $3.70 level. This showed that the bears were still in pretty firm control over the stock, as they were able to beat back the bulls that day. But since then, the stock has soared, going from $3.70 to $5.30 today, a 43% gain. For the last four days, the stock has closed pretty near its highs for the day. This is a very bullish sign. When it broke through its 50 Day moving average of $5.00, and it stayed above this resistance line, it further strengthened my resolve that this stock was set for a good breakout here. The stock has been killed this year, losing over 2/3 of its value, so it seems primed to hit a bottom.

I fully expect this stock to retreat tomorrow. People are going to take profits at this level. Those who have seen this stock fall from $10 all the way down to $3 are going to see this as an opportunity to get out of this stock with a little bit of dignity. If the stock can stay above the $5.00 mark in the face of this selling, then that is a very good sign for the stock, and should signal that the bulls have taken over. This will mean that Jamba has hit a bottom and will most likely be in an accumulation phase. For a small stock like this, this could mean very big gains in the short term.

Tomorrow will be very telling.

I did decide to do a trade. I wasn’t planning on it because I didn’t have a stock I was watching very closely. That was until I looked at my regular portfolio where I own shares of Jamba Juice. I obviously watch the shares in my regular portfolio quite closely, and when I look at the action on Jamba, I like what I see.

I’ve owned Jamba for a while, and I’ve taken a bath in it. I’ve lost probably about 30% of my cost basis in that stock over the last few months. OUCH! But recently Jamba announced a deal with Nestle to sell Jamba Juice in stores. The stock reacted well to that news, but not that well. But since then, the stock is up 50%. Yes that’s right 50%.

But the stock is VERY dangerous. It is a very volatile stock, but I liked the fact that it went above it’s resistance of $5.00 today. I’m not sure it’s a breakout yet, so I only put a small position on and want to watch the movement through the end of the week. I bought 496 shares of the stock at $5.03. I might buy more depending on what the stock does over the next two days. If the stock slips under the $5.00 mark and gets to about $4.50, I will probably close out the position having taken a loss of about 10%