mother of... car!
So what started as an incredible day for TrueCar ended with a very disappointing price action. The stock failed to generate any gains even after a much needed upgrade by the good people at Goldman's.
So, bottom lovers we are, we decided to take a closer peak under the skirt... I mean the hood to perhaps make sense of today's mess.
So, bottom lovers we are, we decided to take a closer peak under the skirt... I mean the hood to perhaps make sense of today's mess.
What we see is an interesting fight between Bears and Bulls to keep the stock price at the levels seen on July 2014 prices. Just take a look at how many times the stock has been moved towards this goal since its huge rally. The bears finally succeeded on April 2nd, 2015. In fact, they send $TRUE's price below the July peaks today. See extreme bottom chart. Ok, now lets lift the skirt all the way up above waist level and take a closer look. On the 5min/1min charts we see massive volume rejecting the stock at prices below $14.44, which happens to be again July's highs. In fact the highest volume was seen during this particular price action move. Chart below. |
Looking at the daily chart, there is simply too much good stuff we can't just say Fuck It and move on: Double bottom, MACD crossed over, RSI rested, first positive SAR in a while, high volume, a massive -32% YTD, 15% short of float, stepped down rallies, falling wedgie, etc. etc. Chart below.
The contrarians could be in full swing with the Bulls, and we don't mean in a mythological Greek Sex scene kind of way. Although that could be probably more entertaining.
Throwing out some number from our analysis, there is really no risk at owning the stock at these levels and there is so much to gain. Setting a stop would probably leave you out of a potential rally that is about to come, but if that helps you sleep better at night, we strongly believe $14.80 is a good stop to prevent a retest to $13.87 if it comes to that. We would argue that a buy of 75% and add 25% if it gets to those levels is more appropriate. Our target is $18~19. Which we would change based on the new data as it arrives. For a long hold I would sell cents below PT of $21.