To the surprise of many, Cord Blood America (CBAI) has not seen the boost we’ve all come to expect even after an acquisition. We are the same price we were before the acquisition. With the numerous amount of positive PR’s as of late, one would have expected a more solid move towards $.02. Unfortunately, that has not happened. When the news isn’t cutting it, we have no choice but to look to the charts for guidance.
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Analysis
The Bad
We’ll start with the significant bad indicators. First off, the CMF has trended negatively for almost 2.5 months straight. That is a terrible sign to start with. This indicates strong selling pressure and a bearish trend that has continued for a while now. Not good at all. The A/D line has also been slowly trending south and while not a terribly strong downtrend, the length of the downtrend is cause for concern. For most stocks, those two indicators right there would be a cause for concern. The RSI is also trending south and is not yet in oversold territory therefore it could continue the downtrend bringing the PPS with it.
The Good (or not so bad)
Now that we got the bad out of the way, we can focus on what positives we have. The MACD is flat which isn’t good but isn’t necessarily bad so I’ll put it in this section. The Bollinger Bands are tightening after consolidation indicating a swing is going to take place, the question is which direction. The PPS had been closing near the top of the bands which is a good sign. Only recently has that changed and the PPS has lightly trended down yet still within the bands. The A/D line is still positive even in the downtrend and the RSI is quickly moving to oversold territory (30 or below) which could help us bottom out and allow for dip buyers to jump in. The most important aspect is the PPS only moves lower on low volume therefore this helps negate some of the problems with the negative CMF.
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Analysis
Overview
Now when we compare the 3 month chart to the 6 month chart looking for trends, we notice something very interesting. This current setup is very similar to the previous setup and run to $.02. The negative CMF, down trending A/D line and RSI all look very similar. The BB is tight as well with low volume. It all seems very similar until all of a sudden, the PPS skyrocketed. Could we see something similar in our near future?
The Conclusion
The trend is very important to me when creating my conclusion. Most of the known (expected) news is out now and the longer we trend with a negative CMF, the more likely we are of losing impatient investors and finally having the PPS match us to the south. However, what is left out of the chart is the Schissler factor. Schissler is a quality CEO who keeps his shareholders in the loop. Since I know Schissler updates us shareholders frequently with positive news, I’m still holding my large position but am more conscientious of the chart and making prudent decisions on where to add as a responsible trader/investor should be. I expect news to hit in the near future as Schissler continues to improve the business. It could be more details on the recent acquisition or something entirely new, I don’t know yet and time will obviously tell. What I do know is that after laying my cards on the table, I still like what I see. Do your homework to see if you agree. See you in the chatroom come morning. Good luck out there.
Mike
At the time of publication, Kudrna was Long CBAI but positions can change at any time.
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Tags: Cord Blood America (CBAI), Michael Kudrna, speculative stocks, Stock Charts, Stock Market Lessons
