The 25 November Gap

I like this stock. I actually want to buy and own it one day. Probably the biggest worry I have is that big gap up on the chart from 25/11/15. It gapped up from 32c to 36c and to me that stands out like a red flag to a bear.

In the 17 odd years that I have been trading I have rarely seen a gap not be filled. I have scoured through hundreds of charts and trying to find an unfilled gap is really hard work.

Given the lack of news flow I think that over the next few months there is a good chance the sp will trickle down & eventually fill that gap.

Again, I like the company & can see the fundamentals look to be coming together nicely for the LONG term. However in the short term there is a large gap on the charts that many traders will be wary of & the earnings are not really that strong YET. The half yearly reported an underlying NPAT of only $60k. For a $64 million company you can see its actually pretty damned expensive. Certainly growth is well & truly priced in atm imho. Also they have only paid $3 to $4 million for their recent acquisitions and profit forecasts for those acquisitions are not a lot different to the whole BPF company which is priced at $65 million.

Imho a promising company but no urgency to hold or enter yet.