hi guys,
Long break for me, I had suspected a market top and it's not happening yet so back in the market a bit.
Out of the stocks ready to move up, I have selected two FOD and THC. Here is the rational for FOD.
- New management - so this is a turn around story, like OLI when I bought in at 2.2c LOL... now +400% from there. I'ts the classic story of a decent underlying business but bady managed, It wont take too much to turn this around. And from what I can see in the reports, its getting there, therefore buying now is buying in before the upside get priced in,
- Verge of CR - market fears a CR, but if you read between the lines, new pricing agreements, increases in sales, strong growth vs category, the signs are the products are working especially the brand they bought. So market is pricing risk of CR too much IMO.
- cash flow will be just about enough IMO. And orders from previous months are coming now to fund the quarter. Same thing on OLI, I said the same thing, others were like "OMG OLI is going broke you fool", rest is history.
- Made a lot of mistakes, all those products which didnt really work, they have impacted investor confidence, now the original juice buy, is perhaps the first good move by FOD in a while.
- Graphically, we've hit the bottom levels I had in mind at 35.5 3.6 3.7 and now we're hitting a very hard ramp. I dont show my graphs, but I dont think Ill get FOD any cheaper. If it breaks 4.5c, we may experience a burst upwards.
- I did play FOD a while back I did a short term trade from 11c to 19c in 2 weeks I think, so this has been on my radar for a while, it was just too expensive. Now it's attractive to me, it'll be attractive to others. Not much volume. So even establishing a mid size position like mine, moves the market quite a bit and provides support.
-Not sure about the cosmetics play, but this provides upside in my opinion, since the market knows at the moment, FOD has had many failed products and launches, if this is a second success, the market can start reevaluating, maybe this company is finally turning around
- Food as an investment category. Those familiar with some of my long term positions like RGI know that to me food is key, as well as cannabis medicine. The future is hinging on better medicine and food supply. So a food manufacturer if managed properly, should be derisked, even during more covid times.
Ultimately, Im buying in because my graphs tell me to. Whatever I believe may be completely off, but more often than not, my graphs make me enter, just before serious movement, sometimes I dont sell fast enough - couch cough CGB - but most of the time the move does happen.
So good luck to all. The bottom may be in
and we're on that ramp, so expecting good stuff anytime in the next 2 weeks.
And watch the US, I expect big moves there too.
(20min delay)