For the last two days I've been discussing SNDA with a friend of mine. She asked me what I thought about it yesterday morning and I told her that I didn't like it because it's under its 50 and 200-day moving averages. Cramer mentioned it on Mad Money last night and caused today's big rally. He had this to say about it:
WOW, MY EMAIL HAS BEEN VERY CRITICAL. I RECOMMENDED THIS DOWN AND OUT CHINESE PLAY AT 16.00. I DIDNT' LIKE IT AT 40; I DIDN'T LIKE IT AT 30; AT 20, YOU CAN HAVE ALL YOU WANT. I WAIT UNTIL IT GOES TO 16, AND BECAUSE IT HASN'T MOVED YET, PEOPLE ARE MAD AT ME. HAVE A LITTLE FAITH! THIS STOCK'S DONE GOING DOWN. I SAY IT SEES 20.00 BEFORE IT SEES 15.00. DO A 'MON-BACK FOR HEAVEN'S SAKES.
Like Cramer, I haven't liked the stock for a good while. I was cautious on it last January just after it broke its 50 DMA for the first time and I really didn't like it in July just after it broke its 200 DMA.
So is it finally time for me to turn bullish on SNDA? Not yet. I sure wouldn't buy it right here, with the 50-day moving average, which should be resistance, nearby. I'd much rather buy near support which would give me a low risk entry. So I'll gladly wait for the stock to break above the 50-day moving average and then consolidate/pullback before I looked for an entry. I also prefer to buy stocks with oversold stochastic as opposed to SNDA which is overbought right now.
I should also note that SNDA reports earnings on February 2nd. I know that's a whole three weeks away but it's just one more thing to worry about. Impending earings alone might keep me out of a healthy stock much less one that's locked in a downtrend.
