$GBG watch for a move lower
$GBG was brought to my attention this morning as a bottoming play, which is my favorite kind of play in penny land. However, the stock is in a confirmed downtrend and saw a 50% gap down earlier this week. If you saw how I played GRPN in a similar setup, you know that it is very difficult to catch a falling knife.
There are no previous support levels to reference for this stock so the best policy is to let someone else take the initial risk and then move in after a pattern has formed.
At this point we are looking at a bearish pattern that suggests additional downside. The hourly chart below shows the key signals that I am looking at. There is a massive gap down below the 20 and 50 hour moving averages which just did a bearish cross. Today, there was a bearish move down and consolidation at the lows of that first hour of trading.
This my friends is a textbook bear flag pattern. If it closes below .08 the stock is likely to collapse further. I am not suggesting a short on this stock because it has already been pummeled, however it is best to let the pattern play out to the downside or set up a reversal signal before putting anything at risk.
There is a lot of volume here at the lows so many weak hands are getting shaken out. But, that doesn't mean that more shaking is not in store. Keep this on your watch list folks.
[IMG]http://i.imgur.com/5lFgR.png[/IMG]
