Wednesday, December 5, 2012

Sandridge Energy - A missed opportunity

On 23rd November I had posted this chart with my comments that I would buy this stock on gapfill at 5.35. As a matter of fact the stock did dip but never fully closed the gap and so I never got a fill (and I forgot about it). It bounce from 5.45 and has never looked back since. Today it closed at 6.45. That would be about 18% higher than what would've been a great entry. I think it goes on to hit the 200sma around 6.80 level.

Here's my quick analysis on a good value pick which finally seems to have bottomed out.

1) SD had a huge capitulation volume on 11/9, a week before SPY bottom.
2) Since 11/9 it has been holding up very well on above average volume.
3) Hedge funds buying into this stock at low 5s.

My entry - Technically, if it drops to 5.35 level which is the gap fill from last Monday, i would enter long on this. This could be a nice long term hold. Stops at 4.55, its previous lows from few months ago.

Chart from 11/23

Chart from 12/05

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