BRLC - Syntax-Brillian may be bottoming out

M

michaelscott

Chart says it all. There is a potential bottom in place.

Here are the facts:

-Almost one year ago today, the price gapped up and then followed a steep uptrend that closely followed the 20 day moving average. 6 months later to the day of that gap, the price started coming down and selling off.

-Almost two years ago today, the price gapped up and then followed a steep uptrend that closely followed the 20 day moving average. 6 months after that gap the price started coming down and selling off.

-There has been lots of questionable events surrounding this company. There is clearly an internet pump/dump scheme going on that is very similiar to the one that took place with LBIX. Im seeing some type of automated program spam all of yahoo message boards. The spamming started occurring around November of last year when there was a price gap up and has continued to the current time.

CEO, Vincent F. Sollitto, was interviewed on Jim Cramer’s Mad Money and said that business for Syntax-Brillian was “booming” and “very well”. The company actually missed analyst earnings per shares by such a wide margin. The management of the company does not appear credible.

- When the 20 and 50 day EMA have crossed, then that has been a signal to buy and to long for at least 6 months while the price travels up the 20 day EMA.

- There is a larger cup that spans the entire trading history of the stock. The stock has retraced almost exactly 2/3 of that cup indicating now might be a possible turning point.

- The MACD indicator has crossed.

So with all this said, this is a very cautious long. I plan on longing it when the 20 and the 50 EMA cross and not before.

There is still many issues such as...

-the company missing estimates the last two quarters despite assurances from the CEO of business "booming"

-the ongoing internet internet pump/dump scheme where a computerized program spams hundreds of duplicate messages across the yahoo message boards

-several internet blogs by notable authors and one hedge fund manager explaining in excrutiating detail why they believe the stock is a short

-Barron's slam articles

-Jim Cramer reserving a spot on his Wall of Shame for the CEO (he usually places large cap CEOS on the wall)

-the price that keeps dumping down making lower lows just about every other week

Despite the issues, I would give the stock a chance if the 20 and the 50 can cross. As history dictates, when those two cross then its time to long, but I would be weak kneed to hold through any earnings calls.

Too many issues with this company and one news announcement could easily tank the stock into obscurity.
 
This is how I would trade this stock...if history repeats then there should be a gap up in the near future. On that gap up, you should wait until the price gets to the 20 day EMA and then long.

Watch the 20/50 and make sure they have crossed before considering a long position.

Consider shorting on any violation of the 50 day EMA which historically has been 6 months after the initial breakout.

I would not fade this stock and get in now due to the issues I have outlined above and I would be hesitant about holding through earnings calls. Wait until the 20 and 50 cross and that should be safe.
 

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Quote from michaelscott:

This is how I would trade this stock...if history repeats then there should be a gap up in the near future. On that gap up, you should wait until the price gets to the 20 day EMA and then long.

Watch the 20/50 and make sure they have crossed before considering a long position.

Consider shorting on any violation of the 50 day EMA which historically has been 6 months after the initial breakout.

I would not fade this stock and get in now due to the issues I have outlined above and I would be hesitant about holding through earnings calls. Wait until the 20 and 50 cross and that should be safe.
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I wanted to thank you again on that micron heads up; still working well and I've added a bit and tossed it into long term hldgs. Again, well done!

As for this one, I'm with you, but my gut feeling is we get another down from here; I think I'll be looking in the sub 4 dollar range for a buy. Just my thought; and of course keep the size small since it is basically a dog..

Best.
 
The following chart shows how this might go down. You can see this huge cup and then what looks like the handle. I will admit that the cup is rough.

The news out about this company is extremely bearish and I see nothing but slam blogs. The only bullish news is those on the Yahoo message board pumping the stock and from the analysts. If you go to each ID on the BRLC Yahoo message board and click on "view messages" you will start to notice that most appear on other message boards pumping the same stocks with the same message. My conclusion is that most of those ids belong to one entity and they are using a program to paste messages across several message boards. The analysts have business relationships with BRLC and not independent.

However, when things look very bearish then it may be time to long the stock. Im hesitant though and willing to wait until the two moving averages cross. I have fresh thoughts of TWTR in my head and I wouldnt fade BRLC.
 

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it appears Motley Fool, whom Patrick Byrne has had a running feud with for some time, published an article on cash burn rate. They neglected to incl BRLC's secondary offering proceeds , and corrected it, AFTER THE CLOSE.

This is not the first time this has happened. I did not follow this today, but just heard about it. But like the SEC investigation into DNDN, it follows a very conspicuous pattern that has not gone unnoticed.

This cost some people a lot of money today. Someone is very desperate.

"flame out candidates. Stocks to avoid."

http://www.fool.com/investing/value/2007/07/12/flame-out-candidates-to-avoid-corrected.aspx
 
Now this is interesting. Almost exactly 12 months ago to this day, there was a similiar gap up.

It seems like the CEO finds ways to pump up the stock every year and then it dumps back down because he isnt able to deliver on the inflated expectations.

I dont believe in the BRLC story nor do I trust the CEO but I do know when someone is throwing a bid under the stock. I wonder if the pop will fade and if they keep throwing the bid underneath. I have a feeling they will and it will go higher as we get closer to Christmas.

If you go to the Yahoo message boards, its obvious someone has been running a pump/dump for sometime now. You see them spamming other messageboards to the point of ridiculousness.

There is so much emotion and opinion surrounding this company. I wonder if BRLC were a 50 dollar stock, would anyone care? The reason why people care so much is because its a single digit stock that has these wide swings. They do whatever they can to swing to include staying up all night and spamming Yahoo, battling it out in blogs, etc.

The only difference this time is that the float is twice as big. Its a fatter man this season. Although the emotions run thick on this stock, the funny part is that everyone just regards it as a trade. As soon as it hits their target price, then they punch out without looking back. Some investors this company has...
 
I got in on the Dec 07 7.50 calls. This chart is screaming at me. Despite all the high emotions and opinions, I cant ignore what this is telling me.

Since the selloff in 2004, this has encountered higher highs and lower lows. I think this just might be the pivot point. and if it makes a new higher high, then it will be a powerful one indeed. The powerful resistance is around 11 and I feel there is a good chance on this next spin to go through. The next higher high should be dramatic if this is what the cards hold.
 

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Quote from michaelscott:

I got in on the Dec 07 7.50 calls. This chart is screaming at me. Despite all the high emotions and opinions, I cant ignore what this is telling me.
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Don't worry michael 'putz' scott the men in the while labcoats will be here any minute to whisk you away back to your padded room.
 
The below is from MS "coming out of the closet" thread posted just 3 days ago. You'd think he may have been burnt by a short on BRLC, but I bet it was just a paper cut.

Quote from michaelscott:

My most successful shorts have been the most obvious stocks that are stinking and sinking. To name a few are AMR, KOMG, BRLC, CC, TWTR, JBLU....

I made a 400% return on trading the puts on AMR and have doubled my cash with CC and BRLC. For some reason, these stocks stopped trading with the overall market a long time ago and you knew that they would fall faster and harder.

From this point forward, I will not long anymore stocks. Its simply not worth it for a trader to long a stock.

However, I am coming out of the closet and joining TraderTim in the most successful strategy of our time. Shorting the market. This was Jesse Livermore's trade of choice so now it will be mine. No more longs. Just make money the good ole fashioned American way, the way the best traders have done so, through careful shorts and distorts.
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