GSHF

[fill_the_gap]

It is never a good experience to start a trade with 20% loss

As usual we had a long talk yesterday after close about picking GSHF. This is an Ethanol play and this sector really has everything going for them. Refiners' are dropping the additive MTBE in favor of ethanol by May 5. The market is therefore experiencing a shortage of Ethanol with resulting price increases.

In addition the Bush administration is pushing for the use of E-85, which is gasoline mixed with 85 percent ethanol, and B-20, or 20 percent biodiesel blended fuel to reduce U.S. reliance on foreign oil imports.

I believe that the ethanol sector is a going to benefit from this fundamental change in the energy policy for years to come.

What makes GSHF stand out from other ethanol plays is two things: They are not directly involved in Ethanol production but rather supplying the equipment for the companies producing Ethanol and they are an investment company holding a number of different companies. Both these factors are reducing the risk compared to investing directly in one of the pure ethanol plays.

We could certainly have chosen a better entry point for GSHF but yesterday night buying at the open was the right decision and today's correction of the whole sector has not broken the strong upwards momentum for ethanol stocks.

This is a penny momentum play so I will wait for eliteG's update after close but I think it is too early to write this one off!

Michael,  applaud !  As always, a nice diligent post.

I like the sector, but have never had a positive experience when Cornell Capital Partners is in the picture.  Any thought on this relationship ?

Trying to remember the past BDC plays.  (HYRF, FCCN to name a few)

Hopefully this will work out for the best.

[netfishmademerich]

Oh I messed up on this one today.  I tried to buy 50,000 shares by the close.  I put in limit order for $0.181 and only had 500 shared filled then the market closed on me.  I now have this $10 commission on just 500 shares.  This is bad!!!!

By the way, I usually buy near the close of the market for 3SOF positions.  I rarely buy "at the open" this strategy allows me to judge for myself if I want in.  Unfortunately this time I wasn't quick enough.

[eggman11]

Don't feel bad. You doing better then most of us. I bought some early around .23 and some at .19. My average is .21. The financing deal with cornell doesn't look so bad. They got 5% rate it is not convertable unless they are no longer a BCS. They have until Feb 2009 to pay back the loan. The companies in their portfolio have generated $30M in annual revenue...


http://biz.yahoo.com/e/060207/gshf.ob8-k_a.html

[Maestro]

Oh I messed up on this one today.  I tried to buy 50,000 shares by the close.  I put in limit order for $0.181 and only had 500 shared filled then the market closed on me.

That's a problem with OTC stocks that annoys me, too. You can't buy at market, you can't give a stop order.

[eliteG]

It is never a good experience to start a trade with 20% loss

As usual we had a long talk yesterday after close about picking GSHF. This is an Ethanol play and this sector really has everything going for them. Refiners' are dropping the additive MTBE in favor of ethanol by May 5. The market is therefore experiencing a shortage of Ethanol with resulting price increases.

In addition the Bush administration is pushing for the use of E-85, which is gasoline mixed with 85 percent ethanol, and B-20, or 20 percent biodiesel blended fuel to reduce U.S. reliance on foreign oil imports.

I believe that the ethanol sector is a going to benefit from this fundamental change in the energy policy for years to come.

What makes GSHF stand out from other ethanol plays is two things: They are not directly involved in Ethanol production but rather supplying the equipment for the companies producing Ethanol and they are an investment company holding a number of different companies. Both these factors are reducing the risk compared to investing directly in one of the pure ethanol plays.

We could certainly have chosen a better entry point for GSHF but yesterday night buying at the open was the right decision and today's correction of the whole sector has not broken the strong upwards momentum for ethanol stocks.

This is a penny momentum play so I will wait for eliteG's update after close but I think it is too early to write this one off!

Great stuff Michael  .. so we'll try to be as loose as we can with GSHF.  There is no easy way to say it.. we got pummeled today by this play.. in fact there is no place you could have bought this stock today, still be holding, and with a profit. 

That makes the team feel like crap(on top of the crap from the mkt today).  Since we bought this stock on the impulse signal from the tall white/heavy volume day yesterday.. we must have this reason still in play for us to hold the stock.  At the same time we all see a lot of potential here as well.  So what we have decided is to put a hold on GSHF and we will  evaluate it on close everyday for a hold or sell.   

We will hold GSHF.

[Lucas Scott]

GSHF was a Hotty when I went to bed with her on Monday night, but when I woke up Tuesday morning..... my beer goggles must've worn off

[Lucas Scott]

On a serious note, today's candle doesn't look so bad. Retraced about 60% of the marubozu on about 60% of the prior day's volume. I could see a nice pennant forming out of this.

[cdmartin]

Looking very very ugly !!!  Have we broken support   EliteG, what is the technical read now

[Maestro]

... my beer goggles must've worn off

Since you brought up the subject of beer goggles – and for those interested in the scientific aspects of it – I quote the following links:

http://www.thesun.co.uk/article/0,,2-2005540939,00.html
http://jakartablokm.com/files/thesis.pdf

Of course, this theorem can also be applied, as you have done, to the critical evaluation of stock charts 

[cpezc]

I have to say that I have never found buying at open to be a good move. Maybe there is a reason to do it with a board like this, but I have always decided an entry price in the past, and will always do so again.  To me buyng at open is like selling at market, which I never do either.

[la-onda]

support @ 0.17$ 

[metro]

Agree la-onda... 9day EMA at .17 I got in at .172 low risk I believe

http://tinyurl.com/eq3hx

[Stocky2000]

this is a great long term investment as eliteg shows in his charts... i am in at 0.183 . Metro you got the perfect entry near support. Congratulations!

[Ramsburg]

This type of stocks work on a different scale...
The same way this 30% correction it's completely normal, a multi-bag movement on the upside would also be not astonishing... different scales... different risk/rewards ratio and strategies to apply.

I see this move as a normal re-test on the breakout zone, a normal throwback, but off course on a whole different scale

I usually don't do this, but I was not expecting to see CSHF below 0.20 after we setup this trade, so I took the opportunity to buy a few shares for my personal account today

Good luck!

[Lucas Scott]

Nice bounce off the 9 ema. Very bullish. It had just gotten a little ahead of itself the other day. I bet we see a 100M share day sometime in the next couple months, when ethanol plays get really frenzied.

I have to say that I have never found buying at open to be a good move. Maybe there is a reason to do it with a board like this, but I have always decided an entry price in the past, and will always do so again.

Buying at the open is not best for an individual trader, but it's the best way for a stock-picking service to do it to ensure the integrity of the service. I was in a group once where the head guy would send out intraday alerts when he bought, i.e. "Bought XYZ @ $1.60". You'd pull up the chart and it would be at $1.85. I think he fudged his entry prices -- picked the entry price he wished he'd got in at. I appreciate the way they do it here at 3SoF.