Saturday, October 19, 2013

A view of CDTI 10/19/13

@easymoneyoc on Twitter asked me of my thoughts on CDTI. Here's some of them.

CDTI Weekly - Note the support turned resistance at $1.98. Expect some sellers in this area.

CDTI Daily - We can see near term resistance @ $1.65. We had a small test of it on Friday with rejection. There was no volume behind the try. There is a rising trendline from the lows of July to the lows of the beginning of October, however it's not as clean as I'd like as the lows of October are the same as in August in the $1.30's. This is more of a horizontal channel.

CDTI 5 Min - Here's a view of the last couple days. Note how thinly this stock trades, even on above average volume days like Thursday and Friday. We can see a spike in price on Thursday with consolidation over the course of the next day and a half. I like consolidation. The stock has run up 16% in the last week. A consolidation period is a nice pause, giving an upside move more of a chance of sticking. This triangle isn't the cleanest, but it is setting up directly under the longer term resistance. Multiple timeframes lining up like this are good. Friday morning had the gap up test of resistance (probably due to an article posted at The Street).

According to, CDTI is due to report on November 13th, which gives enough time for this setup to playout without interference in that way. Analyst estimates are for the company to grow, and there's a price target of $2.00. Do I believe this? Who cares. IMO analyst estimates create hype - which we can trade off of. Also note the company's shares are close to 10% short which is enough to cause a short squeeze on a break above $1.65. Without a doubt, this stock is on my watchlist for a breakout.

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