Monday, December 10, 2007

Jamba - A bit deeper

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.

Jamba chart

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.


  1. good call. now stop-loss the sucker and if it goes above break-even for ya, don't ever let it cut you a minus, re-buy if necessary, but ... success ::-)

  2. I put a stop-loss at $4.52. I did not put one higher, at my buy point, because doing so in such a volatile stock would produce pre-mature selling. I would end up paying a lot of broker fees getting in and out of the stock making my broker rich and not myself. If the stock get's to about $6.00, I'll move my stop-loss higher.

  3. my math is a little different. you bought about 400 shares. break even including buy and sell commission should be about .11 cents above buying. it peaked in the day about 5.56. everything above break even is plus even if you have to re-buy at 5.05! you never know how far bottom is and it takes twice as much to repair a minus and then come back into the money. 4.52 is a sizeable loss if it gets there and well above my other rule, if you can't put your stop at a level where your risk is 1 to 2% of your begin capital, don't do the buy. i'd love to see your commission scale and what are your other trading rules? i try to follow the ones layed out in Dr. Elders book, "come into my trading room" , you might like it as well. success.

  4. Do you think people will continue to splurge on Jamba juices even in the face of a slowing economy? The smoothies cost between $4 to $5 a pop. I've already noticed shorter lines at Starbucks, my friend.