3SOF

AERTA(nasdaq) - Advanced Environmental Recycling Technologies Inc.

Mkt Cap:           104.95M
Float:                  30.41M

Profile:  Advanced Environmental Recycling Technologies Inc. (NASDAQ: AERTA) was established in 1989, and we develop, manufacture, and market our composite building materials to be used in place of traditional wood or plastic products for exterior applications in building and remodeling homes and for certain other industrial or commercial building purposes.

website: http://www.aertinc.com/


Fundamentals and News

This year AERTA is positioned to bring in much more revenue than its mkt cap!  A stellar earnings report was released on May 15:

QuoteAERT Announces First Quarter Results
Monday May 15, 5:13 pm ET
http://biz.yahoo.com/bw/060515/20060515006314.html?.v=1

Highlights:

- net sales for its first fiscal quarter, ended March 31, 2006, increased to $27,665,249 from $19,943,530 for the comparable period of 2005, a 39% increase.

- Income before taxes increased 75%

- Fully diluted earnings per share were $0.02 for the first quarter of 2006, compared to $0.01 for the first quarter of 2005.

- The increases were attained from the existing manufacturing facilities, as the Company's new third composite extrusion facility was not in operation during the quarter.

------------------------------------

Conference Call Highlights:(I listed the following points in chronological order as discussed) http://www.aertinc.com/investor.asp

-revenues increased primarily due to increased factory output and higher pricing(key to revenues is more capacity)

-board has approved share buyback of $3million( board is focused on no more shareholder dilution, prices are attractive right now)

-looking at sites for additional facilities(management is confident on demand)

-preparing to introduce new products(major additions should propel company, quantum leap is set to occur by Jan/Feb homeshow next year)

-continue to gain market share

-capacity increase will help in synergy, (nich is exterior and a lot of products go together in this market and have been limited due to production)

-the focus is #1 on current customers(current customers are growing, good management focus)

-increase in pricing 8%.. decking 10% and more(strong demand)

-continue to expand on R&D for recycling(solid companies focus on their unique technologies)

-constant theme EXPANSION

-unique situation for the company in recycling industry (many benefits..not sure exactly what)

-debt/equity ratio very happy about (working toward +work capital)

-new facility will be full swing July $25M additional revenues at first and $100M total (every 25M additional revenue will cost 3-4 Miillion investment)

-Q3 will add 15-20% more capacity (from work to existing production facilities)

key points: #1 the company's products are hot(increases in sales and pricing), company is adding facilities(good debt/equity), adding facilities will also increase product synergy(as many are related and have been held back by production limitations) company is introducing new products(set to make a quantum leap), board finds current price attractive(share buyback)


Technicals
AERTA has a very powerful chart on all time frames.

Long-term
On the long-term chart AERTA exhibits a constantly uptrending support line.  This indicates investor loyalty and happiness and that could only happen if those investors are satisfied with management decisions.  Price is springing from a solid triple bottom type base with a sustained volume increase.  Resistance points at 2.75 and 3.50 are within reach.. and once they are broken we have a blue sky breakout.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20001.JPG)

Medium-term
On the medium-term chart AERTA has broken out of its 52-week high as well as its ascending channel.. a very powerful move.  This was done on over 2x avg volume but not an extreme amount of volume that would indicate exhaustion.  Moving averages are all below a key bullish sign.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20002.JPG)

Short-term
On the short-term chart AERTA portrays lots of bullish momentum in its text book cup w/handle pattern.  Notice how the chart runs up, then builds a 4 month cup, week-long handle and broke out on thursday.  This breakout area(2.55) should provide strong support.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20003.JPG)


Trade Plan

AERTA has so much going for it we need to have it in both of our portfolios.  This play may take time to develop as the company must deliver in its earnings reports.  If this stock appreciates too fast we will look to sell and buy back again lower.  We hope to hold AERTA for quite some time.  Its amazing to see a stock completely resistant to the recent market downturns.  Even in a bear market there will be star stocks.. we think we may have found one with AERTA.

We will buy AERTA at or near mkt open on 5/19

AERTA(nasdaq) - Advanced Environmental Recycling Technologies Inc.

Mkt Cap:           104.95M
Float:                  30.41M

Profile:  Advanced Environmental Recycling Technologies Inc. (NASDAQ: AERTA) was established in 1989, and we develop, manufacture, and market our composite building materials to be used in place of traditional wood or plastic products for exterior applications in building and remodeling homes and for certain other industrial or commercial building purposes.

website: http://www.aertinc.com/


Fundamentals and News

This year AERTA is positioned to bring in much more revenue than its mkt cap!  A stellar earnings report was released on May 15:

QuoteAERT Announces First Quarter Results
Monday May 15, 5:13 pm ET
http://biz.yahoo.com/bw/060515/20060515006314.html?.v=1

Highlights:

- net sales for its first fiscal quarter, ended March 31, 2006, increased to $27,665,249 from $19,943,530 for the comparable period of 2005, a 39% increase.

- Income before taxes increased 75%

- Fully diluted earnings per share were $0.02 for the first quarter of 2006, compared to $0.01 for the first quarter of 2005.

- The increases were attained from the existing manufacturing facilities, as the Company's new third composite extrusion facility was not in operation during the quarter.

------------------------------------

Conference Call Highlights:(I listed the following points in chronological order as discussed) http://www.aertinc.com/investor.asp

-revenues increased primarily due to increased factory output and higher pricing(key to revenues is more capacity)

-board has approved share buyback of $3million( board is focused on no more shareholder dilution, prices are attractive right now)

-looking at sites for additional facilities(management is confident on demand)

-preparing to introduce new products(major additions should propel company, quantum leap is set to occur by Jan/Feb homeshow next year)

-continue to gain market share

-capacity increase will help in synergy, (nich is exterior and a lot of products go together in this market and have been limited due to production)

-the focus is #1 on current customers(current customers are growing, good management focus)

-increase in pricing 8%.. decking 10% and more(strong demand)

-continue to expand on R&D for recycling(solid companies focus on their unique technologies)

-constant theme EXPANSION

-unique situation for the company in recycling industry (many benefits..not sure exactly what)

-debt/equity ratio very happy about (working toward +work capital)

-new facility will be full swing July $25M additional revenues at first and $100M total (every 25M additional revenue will cost 3-4 Miillion investment)

-Q3 will add 15-20% more capacity (from work to existing production facilities)

key points: #1 the company's products are hot(increases in sales and pricing), company is adding facilities(good debt/equity), adding facilities will also increase product synergy(as many are related and have been held back by production limitations) company is introducing new products(set to make a quantum leap), board finds current price attractive(share buyback)


Technicals
AERTA has a very powerful chart on all time frames.

Long-term
On the long-term chart AERTA exhibits a constantly uptrending support line.  This indicates investor loyalty and happiness and that could only happen if those investors are satisfied with management decisions.  Price is springing from a solid triple bottom type base with a sustained volume increase.  Resistance points at 2.75 and 3.50 are within reach.. and once they are broken we have a blue sky breakout.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20001.JPG)

Medium-term
On the medium-term chart AERTA has broken out of its 52-week high as well as its ascending channel.. a very powerful move.  This was done on over 2x avg volume but not an extreme amount of volume that would indicate exhaustion.  Moving averages are all below a key bullish sign.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20002.JPG)

Short-term
On the short-term chart AERTA portrays lots of bullish momentum in its text book cup w/handle pattern.  Notice how the chart runs up, then builds a 4 month cup, week-long handle and broke out on thursday.  This breakout area(2.55) should provide strong support.
(http://www.3stocksonfire.org/stockcharts/AERTA%2005-18-2006%20003.JPG)


Trade Plan

AERTA has so much going for it we need to have it in both of our portfolios.  This play may take time to develop as the company must deliver in its earnings reports.  If this stock appreciates too fast we will look to sell and buy back again lower.  We hope to hold AERTA for quite some time.  Its amazing to see a stock completely resistant to the recent market downturns.  Even in a bear market there will be star stocks.. we think we may have found one with AERTA.

We will buy AERTA at or near mkt open on 5/19

Will wait for a pullback on this. fully valued at $2.60 for 2006
$3.50 2007
$5.00 2008

Quote from: yukiii on May 19, 2006, 02:15:29 AM
Will wait for a pullback on this. fully valued at $2.60 for 2006
$3.50 2007
$5.00 2008

...perhaps this is the case yukii but stocks that are growing so strong should not be fully valued.. one should have to pay a premium and the chart says take-off.

I like this one.. AERTA is looking good ;) If market will bounce tomorrow and I believe AERTA will also follow ;)

With the way the market goes who knows which way it will go... I bought into aerta july of 05 I was very new at stocks and researched into it seeing that HD and other building material stocks were taking off I purchased 8k shares at 1.35 when it was trading flat for a while. I was keeping an eye on it ever since the first break out of the 1.50 where I sold sometime around that. There is some die hard longs in aerta in since early 2000. I dont know if profit taking is going to happen yet but one thing for sure is G knows how to pick good stocks ;). Just MR market decides where those go sometimes.

AERTA4

AERTA5

Why buy for both portfolios again? If it's long term it should be in Value and if it's for a trade then it belongs in Fire. Also if it goes in both ports there should be different strategies, like a tighter stop on the Fire position for example. That didn't happen with NMKT and GV - the other stocks that went in both ports. I don't see much distinction anymore between the Value and Fire strategies. Maybe these ports should just be combined into one. JMHO. Good luck AERTA longs.  

Quote from: Lucas Scott on May 19, 2006, 03:00:21 AM
Why buy for both portfolios again? If it's long term it should be in Value and if it's for a trade then it belongs in Fire. Also if it goes in both ports there should be different strategies, like a tighter stop on the Fire position for example. That didn't happen with NMKT and GV - the other stocks that went in both ports. I don't see much distinction anymore between the Value and Fire strategies. Maybe these ports should just be combined into one. JMHO. Good luck AERTA longs.  

Very Good Question ;)

I agree value and stocks on fire seem to much of the same. When I think of value I think longterm growth with high growth companies and stable companies with dividends etc. 1-5 year holds for alot of stocks and long term plans and goals. When I think of stocks on fire I think short positions, long positions, momentum stocks, swing plans, short gaps, short on news, etc.

yukiii,


Stock prices and "value" are based on a ton of things.

If you use PE some stocks are at 4 and some at 150

If you use price to sales or price to book or any other method you will find the same wide variance. Most stocks are really priced only by supply and demad and demad goes up when prople think the price in the future will be higher then the price of today.

You post "fully valued"

How are you arriving at that idea? And how is it helpful in determining when adn if to buy a stock?

This question of long and short or value and fire is a good one. I have been curious about this as well. I asked G yesterday on the GV board yesterday about the value aspect of GV, whether it still remained or not and the reply was that decision would now have to be made on a technical basis. Ok, this is confusing. I do get it a bit, a breakdown is a breakdown, and therefore get the hell out, but value and fundamentals are a long term perspective and one which the core belief is that if you are buying it, you are buying at a value lower than the true value of the stock and whether the stock goes below your purchase price or not, in time you will get back to value. I tend to look more to value than momentum and GV, NSTC (Superior Value), Nmkt and SVL were all presented as value. Maybe there needs to be some clarification up front on combination V & F picks as well as value only, as to how these trades are different than any momentum play. Also with the board picking these value choices I have assumed to this point that Michael is doing DD on these picks. Is this the case.

Thanks

uc.

I have been doing very well with buy value stocks bought DTKL, XRTX yesterday these are good buys.
AERTA would be a sell today should peak today. It would have been a great buy in the low 2's

There seems to be a problem with what you call value stocks and what to do with them.
Also a problem with timing value stocks. Example now is GV this is a good buy here at $1.56 SVL
also a good buy here at $4.00 instead of selling good companies when they go down 10% or so and nothing has changed I would also double down and ride the next wave up.
Also adding more  IMOS and CRUS today don't sell good value stocks.

Quote from: metro on May 19, 2006, 05:17:57 AM
yukiii,


Stock prices and "value" are based on a ton of things.

If you use PE some stocks are at 4 and some at 150

If you use price to sales or price to book or any other method you will find the same wide variance. Most stocks are really priced only by supply and demad and demad goes up when prople think the price in the future will be higher then the price of today.

You post "fully valued"

How are you arriving at that idea? And how is it helpful in determining when adn if to buy a stock?

Quote from: Lucas Scott on May 19, 2006, 03:00:21 AM
Why buy for both portfolios again? If it's long term it should be in Value and if it's for a trade then it belongs in Fire. Also if it goes in both ports there should be different strategies, like a tighter stop on the Fire position for example. That didn't happen with NMKT and GV - the other stocks that went in both ports. I don't see much distinction anymore between the Value and Fire strategies. Maybe these ports should just be combined into one. JMHO. Good luck AERTA longs.   

The dual placement stocks usually represent both an amazing technical and fundamental story and have done very well.  Perhaps you are confused in that a value play can also be a quick trade.  I may try to trade this position differently in value but that possibility must present itself.

We have been trading for quite some time together, you and 3SOF...Lucas.  It would be ok to hear something positive from you for once.  Just so you know everybody here is on the same side.

Quote from: metro on May 19, 2006, 05:17:57 AM
yukiii,


Stock prices and "value" are based on a ton of things.

If you use PE some stocks are at 4 and some at 150

If you use price to sales or price to book or any other method you will find the same wide variance. Most stocks are really priced only by supply and demad and demad goes up when prople think the price in the future will be higher then the price of today.

You post "fully valued"

How are you arriving at that idea? And how is it helpful in determining when adn if to buy a stock?

(Applaud) Great post Metro.   8)  Everyone finds value according to their perspective.

Quote from: usedcasting on May 19, 2006, 08:13:03 AM
This question of long and short or value and fire is a good one. I have been curious about this as well. I asked G yesterday on the GV board yesterday about the value aspect of GV, whether it still remained or not and the reply was that decision would now have to be made on a technical basis. Ok, this is confusing. I do get it a bit, a breakdown is a breakdown, and therefore get the hell out, but value and fundamentals are a long term perspective and one which the core belief is that if you are buying it, you are buying at a value lower than the true value of the stock and whether the stock goes below your purchase price or not, in time you will get back to value. I tend to look more to value than momentum and GV, NSTC (Superior Value), Nmkt and SVL were all presented as value. Maybe there needs to be some clarification up front on combination V & F picks as well as value only, as to how these trades are different than any momentum play. Also with the board picking these value choices I have assumed to this point that Michael is doing DD on these picks. Is this the case.

Thanks

uc.

While we always discuss a position.. the analysis is mostly done by the team member posting.  The clarification is not in the portfolios but in the original trade analysis, the updates and by the trader who posts the pick.

Value is not always a long-term play.. it is sometimes a quick adjustment.  The key is to have nice timing.

Quote from: Terliso on May 19, 2006, 02:27:27 AM
I like this one.. AERTA is looking good ;) If market will bounce tomorrow and I believe AERTA will also follow ;)

AERTA Ascending Broadening Bottom breakout reminds me of GNBT but GNBT has longer time-frame & I called that a perfect BROADENING BOTTOM so keep ur eyes open & don't let the profit slip away ;)

Goodluck pips!!!


AERTA & GNBT charts:

GNBT chart is right here on this thread too large can't fit here :(
but i did it before: http://www.3stocksonfire.org/trading/index.php?topic=3662.90


I made another one ;)

Thx for the nice charts Terliso.. its great to see a confirmation on the weekly.  ;)

update AERTA:

Powerful move by AERTA on friday breaking the 2.75 4 year high resistance.  Now we have 3 and 3.50 to deal with on top and we are out of the ball park(blue-sky breakout).  In the other direction we have gap support(2.65), channel support(2.60-2.45) and breakout+ sharp trend support(~2.55).  No stop at this time and we continue to trade the position alike in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: n/a
------

update AERTA:

Powerful move by AERTA on friday breaking the 2.75 4 year high resistance.  Now we have 3 and 3.50 to deal with on top and we are out of the ball park(blue-sky breakout).  In the other direction we have gap support(2.65), channel support(2.60-2.45) and breakout+ sharp trend support(~2.55).  No stop at this time and we continue to trade the position alike in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: n/a
------

update AERTA:

AERTA put in a tall red candlestick that stopped right at channel support.  Volume was still strong and so this move encountered some support.  Time to put in a technical stop although we are looking for a bounce very soon.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.38
------

update AERTA:

AERTA put in a tall red candlestick that stopped right at channel support.  Volume was still strong and so this move encountered some support.  Time to put in a technical stop although we are looking for a bounce very soon.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.38
------

Quote from: eliteG on May 19, 2006, 01:54:07 AM
This breakout area(2.55) should provide strong support.

G.,

Yeah, given how well AERTA has acted, technically, it should provide strong support, and it looks like we'll test it today or tomorrow.

Nice chart action:

1. It broke out of a Symmetrical Triangle on (pattern in blue) on May at 2.22.  That put 2.56 IN PLAY (the top of the pattern) and 3.20 IN PLAY (see math on chart). BULLISH

2. The first order of business was to knock out 2.30 (Blue #3), the high preceding the breakout.  That was taken out May 3. BULLISH

3. AERTA then went directly to the 2.56 target IN PLAY.  The highs May 10 and May 11 were 2.54 .  "Close enough."  Target: 2.56 MADE. BULLISH

4. On a pullback, it would be ideal to see that "prior high" OF 2.30 that got taken out on May 3 become support.  The lows of May 12, May 13, May 14 were 2.31...2.30...2.30.. 

"Prior resistance became support", as it should, and that successful re-test was when the general market first began to tank! (May 11).  VERY BULLISH

5. Next, we wanted to see the highs of 2.56 and 2.54 get taken out.  That occurred on May 18.  BULLISH

3SOF bought that breakout the next morning.

6. Now, it looks like we're in for a test of that 2.54-2.56 breakout.  That "former resistance should be support now."

Additionally, the up trendline off the late April low (Blue #4) comes in today at 2.504 and on Friday at 2.533., offering further support.  That trendline has only two data points, so it hasn't been validated as support by a third hit.  If we test it, and bounce off it, that would look very nice.

AERTA has performed like a champ, technically.  If  support doesn't hold, I'd be concerned, especially given the current lousy market environment.

Nice job on this, G.! 

It sure looks like a potential "Stock on Fire," as well as it has performed.   I hate even to mention charts like IMOS and XING that looked so promising....and then, YEEKS.

I just want to say in advance that if AERTA ends up being a 3SOF stop out, it ain't YOU, G.  This stock has acted very, very well.

Yeah, the 2.22 breakout was a better entry.  Yeah, the successful re-test of 2.30 was a great entry.  Yeah, the breakout above 2.54-2.56 would have been a better entry.  But, all of that is with the benefit of 20/20 hindsight.

"What if" AERTA never had pulled back to 2.30 at all, and just "caught on fire," like some of the picks have?  You're trying to pick stocks that already have "done the work."  They've broken out.  Some have had successful re-tests of breakouts, trendlines etc, and you're looking for them now to "catch on fire!"

Just wanted to mention that, so that members understand when there are stop outs, as we've had in the current market environment.  And, as some members have said, they don't always buy the picks right away.  Nothing wrong with buying pullbacks to support on these picks.  We'll miss those that immediately catch on fire, of course, but that's up to each of us how, or if, we want to play the picks.

Keep up your great efforts, G.!

 

Great work G and Melf.  It is the market that has been taking out the stops and causing losses.

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=6160)

Quote from: Melf Elf on May 25, 2006, 08:03:53 AM
I just want to say in advance that if AERTA ends up being a 3SOF stop out, it ain't YOU, G. This stock has acted very, very well.

AERTA never tested 2,54-2.56 support, but rather, in a horrible market yesterday, alllmost MADE the 3.20 Symmetical Triangle target that is IN PLAY before succumbing to the downward pressure in the entire market, closing at 2.97, still up 3.5% on the day. 

That was a new closing high, and the print of 3.15 was a new 52-week high.

update AERTA:

AERTA has bounced nicely from its channel support and is continuing to move higher.  Volume has come in heavy the past 2 days as we test $3 psych support and encounter some resistance.  Time to move our stop higher.  Our stop is now positioned where this move would no longer look technically attractive on the short-term chart.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

update AERTA:

AERTA has bounced nicely from its channel support and is continuing to move higher.  Volume has come in heavy the past 2 days as we test $3 psych support and encounter some resistance.  Time to move our stop higher.  Our stop is now positioned where this move would no longer look technically attractive on the short-term chart.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

G,

Our daily email from June 5th says "unless it prints our stop @ 2.38" and this shows $2.58????????

This is the 2nd one(TWGP also) I have seen with different stop prices today.

Which one are we using?

basanlas

update AERTA:

AERTA is showing strength in this market!  Today the stock printed an NR7 candle.  This stands for narrowest range in 7 days.  We are now on the lookout for an expansion move.. especially because this NR7 was also a complete inside day(range of today inside body of yesterday).  Looking great!  8)

We continue to trade this position the same in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

update AERTA:

AERTA is showing strength in this market!  Today the stock printed an NR7 candle.  This stands for narrowest range in 7 days.  We are now on the lookout for an expansion move.. especially because this NR7 was also a complete inside day(range of today inside body of yesterday).  Looking great!  8)

We continue to trade this position the same in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

update AERTA:

AERTA is trading near the highest levels of its run.  The stock may be poised for a strong move higher from these levels as volume has remained strong.

We continue to trade this position the same in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

update AERTA:

AERTA is trading near the highest levels of its run.  The stock may be poised for a strong move higher from these levels as volume has remained strong.

We continue to trade this position the same in both the 3SOF and 3SOV portfolios.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

Quote from: Melf Elf on May 31, 2006, 05:39:32 AM
AERTA never tested 2,54-2.56 support, but rather, in a horrible market yesterday, alllmost MADE the 3.20 Symmetical Triangle target that is IN PLAY

The 3.20 Symmetrical Triangle target MADE just after the open.  Nice pick, G.  Applause.

AERTA is running higher on the Rectangle breakout above 3.14-3.15.  Volume already is 3 times 100-day average in the first 45 minutes of trading. 

The Rectangle breakout puts Target: 3.48 IN PLAY.

Quote from: Melf Elf on June 12, 2006, 10:17:59 AM
The Rectangle breakout puts Target: 3.48 IN PLAY.

Rectangle Target: 3.48 MADE.

That's two scores for the bulls in just over an hour of trading this morning, on 4 times average 100 day volume.

After breaking out above 3.14-3.15 resistance and rallying to 3.55, AERTA came back and tested the breakout.  Tuesday's and Wednesday's lows were 3.15 and 3.16.  "Former resistance should be support."  It was.

Today, AERTA has broken out above Monday's high of 3.55, and also has taken out the January, 2000 high of 2.56, so it's at multi-year highs, currently at BID 3.57...ASK 3.60.   

Thx for the great technical updates Melf  8)

update AERTA:

AERTA continues to demonstrate strong volume on this run so we feel very good about this stock.  This high volume up in the pattern allows the weak big hands to step out and release selling pressure... meanwhile the big volume attracts new investors and traders.

Price seems to be traveling in a channel and there also seems to be support @ 3.15 and ~3.00.  For the 3SOF portfolio we will raise our stop.  For the 3SOV portfolio we will give AERTA a bit more room to play out its value and maintain our stop in the same position.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.91
------

update AERTA:

AERTA continues to demonstrate strong volume on this run so we feel very good about this stock.  This high volume up in the pattern allows the weak big hands to step out and release selling pressure... meanwhile the big volume attracts new investors and traders.

Price seems to be traveling in a channel and there also seems to be support @ 3.15 and ~3.00.  For the 3SOF portfolio we will raise our stop.  For the 3SOV portfolio we will give AERTA a bit more room to play out its value and maintain our stop in the same position.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

Quote from: eliteG on June 16, 2006, 03:09:06 AM
Price seems to be traveling in a channel and there also seems to be support @ 3.15 and ~3.00.  For the 3SOF portfolio we will raise our stop.  For the 3SOV portfolio we will give AERTA a bit more room to play out its value and maintain our stop in the same position.

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.91
------

G.,

Nice going on this stock, and I applaud the idea of having different strategies for the different porfolios.

Yes, 3.14-3.15 has been very good support, and the up trendline off the mid-May low comes in right at the 3.00 that you mentioned.

Some weekend T2T, for an exit strategy:

1. We had two upside targets that were MADE: 3.20 and 3.48, the average of which is 3.34, for about a 20% gain on the trade if ½ the position were sold at each target.  I like to "take profits when targets get MADE."  Or, at least "some" profits.

If AERTA opens near Friday's close of 3.31, selling a reasonable open would lock in that gain.

2. Since 3.14-3.15 was resistance and then became good support, I'm thinking that if 3.13 gets printed, the 3.00 trendline will get tested, and possibly broken since it will be the first technical misstep in AERTA in a long, long time.  Technically, it's been a perfect 10, in my opinion.

A print of 3.13 might be another consideration for a sell, to lock in profits.

3. A break of that up trendline (near 3.00 now) would be a second technical misstep, which could bring in more selling, AND a stop out AT 2.91, for a 5% gain.  A gain is a gain, but with a paper gain now near that 20%, I'm thinking that the trade could do better than that.

MACD histogram has given a DOUBLE negative divergence on the last move to a new high at 3.71.

The first negative divergence resulted in the MACD itself kicking higher off its signal line, and moving higher with the stock, confirming the new high.  Good illustration that a negative divergence doesn't necessarily mean "sell."

But, now that we've got a DOUBLE negative divergence, "if" AERTA takes out the strong 3.14.3.15 support, MACD likely will go below its signal line (it's already rolling over to the downside).

Again, that doesn't "necessarily" mean a sell in a stock that is in a strong uptrend like AERTA is, but personally, if 3.13 got printed, I'd be inclined to bank the 13% profit.

Just my opinion, and some "T2T."  You're doing a GREAT job, G., in very, very difficult market, and I greatly admire you, Frederick and Michael for not letting it get you down, and for continuing your efforts at 3SOF. 

Thank you.

Quote from: Melf Elf on June 18, 2006, 04:31:52 PM
MACD histogram has given a DOUBLE negative divergence on the last move to a new high at 3.71.

The first negative divergence resulted in the MACD itself kicking higher off its signal line, and moving higher with the stock, confirming the new high. Good illustration that a negative divergence doesn't necessarily mean "sell."

But, now that we've got a DOUBLE negative divergence, "if" AERTA takes out the strong 3.14.3.15 support, MACD likely will go below its signal line (it's already rolling over to the downside).

I don't want to put to fine a point on that DOUBLE negative divergence in AERTA's MACD histogram, but at the same time, I'd rather illustrate my point now rather than after the fact, if the stock gets into technical difficulty.

AERTA is positioned similarly to HOM when it topped out on the DOUBLE negative divergence in its MACD histogram.  Like AERTA, HOM went to a new high off the first negative divergence, but on the DOUBLE negative divergence, HOM moved down on a Bearish Evening Star, on May 24.

May 25, HOM closed at 11.45, and MACD crossed below its signal line, which "can be" a sell signal.  That isn't ALWAYS a sell.  As technicians, we have to decide whether or not we want to take the signal. 

"After a big run-up in the stock, do you want to sell the DOUBLE negative divergence in the MACD histogram, and the MACD itself, crossing below its signal line?"

May 26, HOM closed at 11.09, below near=term horizonal at 11.25, and also closed below the Kijun-Sen and the Tenkan-Sen (solid green and red lines).

"Do you want to sell the DOUBLE negative divergence in the MACD histogram, the break in MACD below its signal line, the break below 11.25 horizontal support, and the break below the Kijun-Sen and the Tenkan-Sen?"

As far as we know, AERTA looks fine fundamentally, but to my knowledge, so did HOM when it topped out at 14.14.

Who knew that it would crash 66%, 8 days later?   ???  :o

I have no reason to suspect anything that dire for AERTA, but we also can't possibly know those things in advance.  We get the negatives that HOM was telegraphing, technically, then we find out the news later on.

Bottom line:

"We've got a DOUBLE negative divergence in AERTA's MACD histogram.  If the MACD turns down below its signal line, and if 3.14-3.15 support gets broken, do you want to sell?"

"If all of that happens, and if the up trendline off the April 28 low gets broken today at 3.00 (that trendline rises at 0.029 per day), do you want to sell?"

Forgive the comparison to HOM, a crashed stock.  Again, I certainly don't have any reason to suspect that kind of action in AERTA.  Yeeks.  It's still acting great. 

Last week's candle was a Bearish Inverted Hangman.  The "wick" was a little more than double the "real body" (that's the white part of the candle, representing the open and close).

The low of the Bearish Inverted Hangman is 3.15, which has been strong support (3.14-3.15, actually).  To be bearish, that candlestick needs downside confirmation, so again, a print of 3.13 would be at least the beginings of that confirmation, especially a close below 3.14-3.15 with attendant MACD going below its signal line.

Sorry if I sound down on AERTA.  The opposite.  It's been a stellar performer in a horrilble market.  Just trying to anticipate if there's gong to be a problem, before it becomes one.

Quote from: Melf Elf on June 19, 2006, 04:50:40 AM
Last week's candle was a Bearish Inverted Hangman.

In the daily chart, the last four candles have been a Bearish Dark Cloud Cover and 3 Bearish Doji Star Hangmen.

Quote from: Melf Elf on June 19, 2006, 04:27:14 AM
MACD histogram has given a DOUBLE negative divergence on the last move to a new high at 3.71.

Yesterday, MACD crossed below its signal line, by just a hair, on the heels of the DOUBLE negative divergence in the histogram, so that's an alert.

We're getting warnings of possible selloff in both the daily and weekly candles, and in the technicals.  A print of 3.20, a penny below yesteday's low, would be another indication that 3.14-3.15 support is going to be tested again, and possibly broken this time.

Next support would be the up trendline (red) off the April 28 low, which comes in today at 3.058.

MACD

Hey Melf.. thx for the charting and opinions(great TA!  ;D).. I agree that AERTA may slow down and consolidate now... and so..

update AERTA:

AERTA has been a great mover for us on both the 3SOF and 3SOV portfolios.  We think there may be a good oportunity to sell the stock at a nice level tomorrow since the market seems to be in a bull mode and may give us a great opening(perhaps even more  ;)) 

We are only selling AERTA on the 3SOF portfolio and will maintain the position in 3SOV for now.  AERTA is being sold from 3SOF portfolio because it has risen a lot and may be hinting at some weakness.  We need to protect this profit and hopefully will have an opportunity to jump in again.  ;)

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Position: bought AERTA @ 2.77 on 05/19/2006
Order: Sell AERTA on Thursday 06/22
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G.,

Congratulations on the nice trade! 

As you know, negative divergences in strong stocks like AERTA can go on for a awhile, with the stock going higher.  In this case, if that happens, you've still got it in the 3SOV portfolio. 

Meanwhile, with the stock showing some technical weakness, you've banked a very nice gain here.  Good going.  Applause!   

More signs of technical weakness:

1. Friday's candlestick is another Bearish Dark Cloud Cover (the close was half way, or more, into Thursday's white candlestick.

2. MACD (Daily) failed from below its signal line, so far, and has ticked down (next post).

3. The weekly candle is a Bearish Doji Star (needs downside confirmation).

For learning purposes, at Thursday's close, when we saw the MACD struggling with the back-test of its signal line (see MACD chart in my last post), Thursday's low of 3.40 can be used as a "sell pivot," meaning that a print of 3.39 is a sell, or sell short.

Here's why: Thursday's open was 3.40.  The close was 3.50.  We know that the technicals are weak.  If 3.40 were to be taken out to the downside on Friday (it was), that suggests further weakness, specifically that MACD likely will tick down from the re-test of its signal line (it did). 

That's just one indictor, of course, but it's a piece of evidence, and it's a "failure" signal.

Friday's open was 3.59.  AERTA rallied to 3.66, near the recent high of 3.71.  When we see the stock:

a. come back to the 3.59 open, then print 3.58...
b. come back to Thurday's 3.50 close, then print 3.49, thereby going into the red on the day...

...that's a pretty good indication that the stock is confirming the weakness that's we've been seeing recently, and that Thursday's 3.40 likely will be taken out on Friday, or early next week. 

It was taken out on Friday. 

Friday's low was 3.32, triggering the "sell pivot" on the print of 3.39, a penny below Thursday's 3.40 low.  Friday's close was 3.42.

Most brokers won't allow a short in a stock below $5.00, but if they did, shorting just about anywhere on Friday's weak rally to 3.66...at the print of 3.58, a penny below the open...or, at the print of 3.49, when AERTA went into the red on the day...or, at the 3.39 "sell pivot" is a real decent play as a sell,  as a short, hedging* against a long-term position in the stock, or as an outright short.

(*You continue to hold the stock long-term, but you protect your position by benefiting from any downside, short-term). 

Remember that this is just an example of what technical indications we would look for to sell any stock, or to sell it short.  In other words, "How much evidence do I have, that this might be a good place to exit?" 

AERTA certainly could go up next week,  and knock out the 3.71 high, but there's a good bit of evidence that progress to the upside might be difficult right now, and that there's a good chance 3.145-3.15 DOUBLE support will be tested, and possibly broken.

The up trendline off the late April low comes in on Monday, June 26, at 3.145.  That's where we had the all of those 3.14-3.15 prints, at the top of the Rectangle in late May and early June, so that's DOUBLE support.

AERTA - MACD

Quote from: Melf Elf on June 23, 2006, 05:46:32 AM
G.,

Congratulations on the nice trade! 

As you know, negative divergences in strong stocks like AERTA can go on for a awhile, with the stock going higher.  In this case, if that happens, you've still got it in the 3SOV portfolio. 

Meanwhile, with the stock showing some technical weakness, you've banked a very nice gain here.  Good going.  Applause!   

Thanks Melf!  8)  Thank you for your chart analysis and opinions as well.  This trade went really well and I hope we get to enter this stock again.  Great job everybody who banked this +20% play!  :o

Quote from: Melf Elf on June 25, 2006, 07:10:27 AM
AERTA certainly could go up next week,  and knock out the 3.71 high, but there's a good bit of evidence that progress to the upside might be difficult right now, and that there's a good chance 3.145-3.15 DOUBLE support will be tested, and possibly broken.

G.,

AERTA tested and broke the 3.14-3.15 support this morning on the technical weakness that we've been seeing. 

Quote from: eliteG on June 16, 2006, 03:09:06 AM
Exit: stop @ 2.91

Today's low was 2.91., which would have been a stop out.   

You did great, exiting at 3.45!  ;)

update AERTA:

AERTA has fallen out of its sharp ascent(and this is why we sold it in 3SOF portfolio) and is trying to find support.  Volume has been high which we can take as a positive sign(stock is finding it tough to move down).  We are looking to add AERTA back to 3SOF soon... as it is approaching support levels that offer an attractive risk/reward ratio.  For now we will hold in 3SOV with our stop.

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Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
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update AERTA:

------
Position: bought AERTA @ 2.77 on 05/19/2006
Order: Hold
Exit: stop @ 2.58
------

is AERTA still the right symbol for this one? or AERT?

Time to sell?
Dropped below 2.58!

http://finance.yahoo.com/q/bc?s=AERT&t=1d&l=on&z=m&q=l&c=

Lalitha

Quote from: Melf Elf on June 25, 2006, 07:10:27 AM
More signs of technical weakness:

1. Friday's candlestick is another Bearish Dark Cloud Cover (the close was half way, or more, into Thursday's white candlestick.

2. MACD (Daily) failed from below its signal line, so far, and has ticked down (next post).
3. The weekly candle is a Bearish Doji Star (needs downside confirmation).

For learning purposes, at Thursday's close, when we saw the MACD struggling with the back-test of its signal line (see MACD chart in my last post), Thursday's low of 3.40 can be used as a "sell pivot," meaning that a print of 3.39 is a sell, or sell short.

For those of you learning technical analysis, I wanted to follow up on what happened after that MACD signal we got in June, after all 3 upside targets MADE, and after price confirmed it with the print of 3.39).

Here's what the MACD did afterwards.  I'll post the price chart next.

After the MACD signal, AERT broke below a Symmetrical Triangle, went into a Bear Flag then broke below that, then found a short-term low three weeks after the signal at 2.39, down 35% from the 3.71 high. 

Incidentally, there was a nice rally off the Double Bottom, at 2.39 - 2.40, but that got broken in September.  Note that the first rally after the break failed at 2.37.

"Former support 'should' act as resistance."  It did. 

Advanced Environmental Recycling Technologies, Inc.. (NASDAQ: AERT)
Changed Ticker Symbol.......
AERTA is no longer valid. It has changed to "AERT"
The threads on this pick in Previous 3SOF Picks Board, Have been merged.


Since 1989, AERT has pioneered the use of recycled polyethylene plastic in the manufacture of composite building materials. With its constantly evolving portfolio of patented and proprietary recycling technologies, AERT has been widely recognized as a leader in resource conservation innovation, receiving the EPA Award for Environmental Excellence for its process of converting scrap plastic to composite outdoor decking. AERT converts reclaimed plastic and wood fiber waste into quality outdoor decking systems, fence systems, and door and window components. The Company is the exclusive manufacturer of Weyerhauser ChoiceDek(R) decking, which is available in multiple colors and is sold in all Lowe's Home Improvement stores. See www.choicedek.com for more information. AERT operates manufacturing facilities in Springdale, Lowell, and Tontitown, Arkansas; Junction, Texas; and Alexandria, Louisiana. For more information on the Company, visit www.aertinc.com.


52wk Range: 1.29 - 2.94
Volume: 23,183
Avg Vol (3m): 77,104.1

I will leave you with Friday's closing chart while I'm in this thread.......