3SOF

yeah I dumped my huge chunk of this stock too 

Yesterday's action was pretty rough.  I hink FRPT looks like it needs to close that gap at $16 and play with the 50MA before it will recover, despite todays more positive candle.

Additional chart

Market aside, here is the statement from FRPT's contract management consulting firm.

http://catalystresearch.biz/files/CFR__FRPT_Note_01_29_07.pdf

FORCEPROTECTION INC. Disclosures: 1, 2, 4A, 5, 6, 10
(OTCBB: FRPT: $20.14,BUY)
INDUSTRY: DEFENSE

Force Protection: Covering Bases while Saving Face

Friday's announcement regarding the award of firm-fixed-price, indefinite-delivery/indefinite-quantity multiple award contract for vehicles to fulfill the MRAP initiative essentially fulfills two facets of a sticky political situation for the Government. The military needs these trucks as early as yesterday...everyday it costs more USsoldier lives. On the other hand, how does a contract of this size and importance go to an operation that was nearly bankrupt a year ago and was the "red-headed stepchild" of the industry?

Today, Force Protection's vehicles possess the best design. The Company has hot lines up and running and they are increasing the rate of production with every passing month. The vehicles are fully tested and validated in the field and, the soldiers in Iraq and Afghanistan feel most comfortable in hostile lands with this equipment. Lastly, there is no doubt that the Cougar, Buffalo and within the next month, the Cheetah, are all manufactured in the USA.

The award delivered last week opens the door to all those manufacturers that feel they should be part of the supply process. It essentially closes the door on those that might have grievances about Force Protection being a pre-designated, primary supplier to the MRAP. So behind door #1, we have a way for the DOD not to lose face, to open the opportunity to those that believe they should participate, and to shut out the possibly of an award protest that would take considerable time and prolong the production and fulfillment ramp.

Behind door #2 is an opening for the military to buy essentially all the mine resistant and ambush protectedvehicles it needs. While the net is cast for other contenders, a flow of "urgent" trucks can be filled via the existing relationships.

Of course the market is disappointed in the Company not receiving a giant portion of the contract with Friday's announcement. We already were thinking that investors were betting too much on the complete winning of the contract by FRPT. But we do not take this action by the DOD as a real negative particularly since FRPT has an established record of its truck in the field and that they have already received initiating orders to start the flow of equipment.

What we feel as interesting is that Force Dynamics—the joint venture between Force Protection and General Dynamics—was not included in the list of manufacturers that were named in the contract. Could it be that the Cougar already has sufficient "testing data" and could be a back door supplier?

The only problem I see with this stock is it may go slightly higher this year. However but 2008 focus will be on ending the Iraq war and a new president. Once the war in Iraq winds down there is really no need for more anti mine vehicles since we will be planning an exit soon from Iraq. FRPT needs more diversification... like making drone vehicles that can fire weapons and defuse bombs and mines. This reminds me of TASR all to well, the FRPT chart looks good for a medium to long term short.

"Yesterday's action was pretty rough.  I hink FRPT looks like it needs to close that gap at $16 and play with the 50MA before it will recover, despite todays more positive candle."

Well I am the rookie here. I guess I was too hopeful about support at 18. Woke up after the Santa Clause rally and the bust of 2007 as an up year. Now I only hope ScottishTrader is right. Wall Street and the NASDAQ did not like the fundamentals I guess.

thestreet.com was right all the easy money was made from 18 to 24, where I assume all the veterans jumped out.

Here is what I am believing. That the formality of the government must require an open competitive bidding period. During this period the government cannot show favoritism to ensure a fair process and decision. No conflict of interest and no unfair advantage.

So from 16 the recovery to 18 and nothing until the substantial contract announcement by fall? With increasing production FRPT could work through the backlog of orders in months. This could sag and slide for a while without good news.

Panic selling next?

Looks like a good short setup. Set a stop in the low 18s and ride FRPT down below 16 or below if it decides to show more weakness and move in that direction. This stock can have long term weakness if there is any signs of pulling out troops or troop reductions in Iraq.

Looks like good advice, if we are lucky. Sideways from here until it breaks up or down.

I understand the insider selling. The sellers have been in it from the beginning, they are not out to get rich by holding. They answered the question: How rich do I want to be?

With 17% institutional and 23% insider, with 77% float the rest of the insiders appear to be holding.

Quote from: nullzero on February 03, 2007, 06:12:27 AM
Looks like a good short setup.

Nullz,

Hmm-mm....concerns that I would have about shorting FRPT here:

1. It's "shorting into the hole."  FRPT already has sold off 35.4% from the 24.30 high, to Friday's 15.70 low, which is quite a bit, and the trend still is bullish.

2. "Possible" Bullish Falling Wedge, in a bullish trend.  The technical breakout for Monday is 17.41, but a print of 17.61, a penny above Friday's high, would be more convincing, and could bring in the breakout Momo Boys.

3. Friday's low violated the 50DMA, but FRPT managed a close above it.

4. Friday's low was very near the top of Kumo (Cloud) support.

5. Friday's candle was a Bullish Hammer.  The tail was exactly twice as long as the "real body" (the open and the close).

6. The close higher also was an upside reversal (needs to rally, for confirmation).

7. A stock that has been this bullish usually doesn't go down without a fight.  A 35.4% selloff certainly was warranted, given the huge gains, but these stocks can have a good bounce after that kind of giveback.

8. 19.56 - 20.00 kind of "begs" for a re-test. 

a. 19.56 was the low, prior to the failure at the 8-day Tenkan-sen (solid green).

b. 19.75 is an unfilled gap

c. 19.99 was a sell signal in the 34/55RSI, which sometimes gets re-tested

d. 20.00 is the 22-day Kijun-sen (solid red), which has rolled over and likely will be lower on Monday, but that's where it was on Friday.

All of that said, watch this thing crash on Monday!    

Good luck, whatever you decide!

I was about to post the same thing, but Melf beat me to it (and his comments are quite reasonable).  The "smart money" has already been made on the short side.  A good short would have been the gap down opening on the 29th Jan, but right now I think FRPT may have put in a bullish reversal candle and is ready to atempt a rally again.  It managed to fill the open 21-22 Dec gap, pierce the 50MA and rally back to the upside.  Also it nearly completed a 50% Fib retracement of the Nov-Jan run. 

I would actually be inclined to go long here, looking for a breakout above 17.56-60 short term resistance, with a stop just below 16.80, which looks to be short-term support.  Short term targets would be a rally through $18, $19 and up to the $19.32 gap down opening from the 29th.  A break of $18 would confirm a breakout of Melf's possible falling wedge, and descending resistance from the recent downward move.

Quote from: ScottishTrader on February 04, 2007, 08:37:08 AM
right now I think FRPT may have put in a bullish reversal candle and is ready to atempt a rally again.  It managed to fill the open 21-22 Dec gap, pierce the 50MA and rally back to the upside.  Also it nearly completed a 50% Fib retracement of the Nov-Jan run.

Scotsman,

Yes, I forgot to mention that gap fill of 16.00.

Quote
I would actually be inclined to go long here, looking for a breakout above 17.56-60 short term resistance,

I'm thinking about a long postition, too.

Quote
with a stop just below 16.80, which looks to be short-term support.

16.80 - 16.81 actually was short-term support, but it got broken Friday morning, then FRPT went swoosh to the downside to 15.70, on heavy volume, which was at least a short-term "capitulation low" since the stock bounced back so quickly.

There was another heavy volume low (red arrow at the beginning of the chart) of 16.92 on January 30, but price didn' t spike down as hard as it did on the move down to 17.20 EDIT: 15.70, and the 18.48 high of that day wasn't taken out to the upside the next day.  FRPT meandered sideways, then continued down.

Friday's Bullish Hammer (only bullish with upside confirmation) off the 50DMA and near the top of the Kumo (Cloud), as I mentioned, looks a bit more promising.

What would look really, really nice on Monday, would be for FRPT to begin the day down, re-establish 16.80 - 16.81 as support, then start climbing its way back to UNCH, then knock out 17.60, Friday's high, with a print of 17.61.  That kind of action "should" bring in the Momo Boys at/near/above UNCH, and additional buying on the print of 17.61.

That scenario still could play out even if FRPT breaks 16.80 - 16.81 and goes a bit lower, then goes back to UNCH, but it's much more convincing when broken support gets re-established as support.

It sure would be interesting to know what the short interest has been during this selloff.   Picture if all of us had entered short at the 19.99 sell signal, basis the 34/55RSI, or at the gap down opening to 19.32 on January 29, as you suggested.

We'd have a very nice gain, well over 10%, depending upon where we shorted, but wouldn't we be a bit nervous holding short, given the bounce off the 50, the Bullish Hammer, and the bullish reversal close?

FRPT certainly could go down and take out Friday's 15.70 low, but I would have had a very difficult time justifying remaining short Friday's bullish-looking candle.

For Monday, if FRPT heads down early, then rebounds to UNCH, I'll buy it with a stop below whatever low gets put in.

I know what you mean shorting into the hole (even if the fundamentals say otherwise the stock can rally just because its been massively oversold.) Homebuilders are a good example of this... massively oversold fundamentals very weak and are not showing a turn around yet but the stock has rebounded quite a bit. True of the 50dma bounce as well melf. I guess we will have to wait and see the bearish case would be with the insiders cashing out and with a lack of news this stock has a good chance of move lower.

Quote from: nullzero on February 04, 2007, 01:23:16 PM
I know what you mean shorting into the hole (even if the fundamentals say otherwise the stock can rally just because its been massively oversold.) Homebuilders are a good example of this... massively oversold fundamentals very weak and are not showing a turn around yet but the stock has rebounded quite a bit. True of the 50dma bounce as well melf. I guess we will have to wait and see the bearish case would be with the insiders cashing out and with a lack of news this stock has a good chance of move lower.

Nullz,

Right.  You've got the idea there.

FRPT "could" simply keep tanking to the downside from here, but what you've described is more usual behavior, especially in a stock that has been this strong.   A technical bounce of some sort would seem to be in the offing soon, even if it isn't a very good one.

Now, if FRPT had completed the kind of top here that NTRI did on January 18, that's a ver-ry nice place to short.  NTRI broke the Bear Flag (blue) and broke the neckline of the H&S Top in the same session.   

Shorting it any time after those two breakdowns during the next five sessions, got handsomely rewarded.

If NTRI had been lying to us, we would have covered the short above the Right Shoulder, which was 68.25.  Nice risk: reward on that trade like that.  About 1:3.

Too bad we missed it.   

But, shorting NTRI here is "shorting into the hole."  It already is down 44.2% from the high thus far, so while it still could go a lot lower,  a lot of the gain on the downside already has been made. 

Essentially, we missed the short trade in NTRI.

"Sell and/or sell short at technical breakdowns."

"Sell short on re-tests of breakdowns" (like shorting NTRI on the little re-tests, in the five days after the H&S Top broke down).

It makes me drool to think about shorting NTRI back there (we need a Slobbering Face on the toolbar).

Shorting FRPT here "could" work out, but as we discussed at the weekend, there are a number of things that suggest a "bounce," as you mentioned.

We'll see, huh?   

FRPT currnetly is indicated at BID 17.96...ASK 17.99, well above Friday's 17.20 close, the 17.41 technical breakout of the Bullish Falling Wedge, and the 17.61 takeout of Friday's 17.60 high.

I won't chase that.

CURSES!!    

I'd buy somewhere 17.41 to 17.65 if it pulls back, though.

fyi:
Force Protection, Inc. Announces New Production and Delivery Records in January
Monday February 5, 8:45 am ET

LADSON, S.C.--(BUSINESS WIRE)--Force Protection, Inc. (NASDAQ:FRPT - News) today announced that its vehicle production and delivery numbers again reached record highs in January. The leading armored vehicle manufacturer delivered more than 60 vehicles to the U.S. government last month alone.

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The Cougar Joint Explosive Ordnance Disposal Rapid Response Vehicle (JERRV) and Iraqi Light Armored Vehicle (ILAV) programs led production numbers. U.S. armed forces have used the Cougar JERRV in Iraq and Afghanistan since 2004. The Cougar ILAV, which is produced with BAE Systems as prime contractor and Force Protection as subcontractor, was first delivered in 2006.

"Our January deliveries are reflective of aggressive ramp up efforts," said Force Protection Vice President for Program Management Damon Walsh. "We also look forward to our first MRAP deliveries to the government early in February, as we add this vitally important product line and continue to expand deliveries."

Force Protection's Buffalo and Cougar mine-protected vehicles have been deployed in the global war on terror since 2003, and have an unmatched record for safety, mobility, and sustainability over more than 2 million hours of heavy combat operations.

"The uniformed war fighter is our most important customer," said COO Raymond Pollard. "He has asked for the life-saving blast protection technology incorporated in our vehicles. We are clearly demonstrating the ability to provide this solution through Force Protection's efforts and the efficient use of our production partners."

still holding long and strong 
cheers
O.

Bought FRPT at 17.52.  Stop: 16.69.  Risk: a loss of 4.7%