Stocks on Fire

A simple thing to buy today: SFP

By David Randolph · August 30, 2005 · 1 min read · 524 views

I went on reading some news and SEC fillings of this company, but then it came to my mind that the stock game is a simple game, it is our mind that loves complexity.

SFP has one of the most easy to understand technical patterns: the ascending triangle.

The technical target of the ascending triangle breakout is $5.55, that is 50% higher than yesterday's closing price. The pattern is invalidated if the stock closes again below the breakout point, which was $3.33, so risk here is about 10%.

A reward/risk ratio of 5 is attractive. I'll jump on the bandwagon today, buying SFP for the 3 Stocks on Fire Portfolio.

The stock has a very small market cap of $42M, so it is able to move really quickly. The latest news are very bullish:

Salton Bounces on Note Truce

Salton soars; co. inks support deals w/ noteholders

Salton sees $80M from sale of Amalgamated Appliance stake (selling a part of the company for $80 million and the market cap is just $42 million?)

(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. 3 Stocks on Fire is a Community of stock traders and investors. Our 3103 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register and receive our free newsletter)

David Randolph
www.3stocksonfire.org

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A simple thing to buy today: SFP

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