Hi Mr. Germo, I lost money from buying the CHP after the IPO. I just followed what my friends told me, now I am down almost 40%, What should I do?
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CHP is bearish for the short, mid and long term. We don’t have any buy signals for both investors and position traders. On a fundamental aspect, CHP’s income was much lower than expected and in the stock market lower income means investors selling down the stock. Also, for those who are new to this blog, I have mentioned it over and over prior to Cemex going to the PSE that I am not a fan of companies who would use chunks of their IPO earnings to pay off debt and that’s what CHP did. As an investor you should go for companies who would use the proceeds of its IPO for expansion and not debt repayment.
On a technical analysis position trader perspective, the stock will reverse from bearish to bullish if it breaks out of 9.6. That’s when you start to come in if you are a position trader when there is a clear evidence that the stock has stopped from falling and is now reversing up.
While for quick traders, you can trade the range and buy at 6.63 (as long as that support holds) and sell at the resistance at 8.1. Make sure to cut loss if the support at 6.63 will not hold as this would bring the stock even lower specially that the prevailing trend is still bearish.