Can you say follow-through? On Monday, we pointed out how Spicy Pickle’s (OTCBB: SPKL) chart looked a heck of a lot like a bullish engulfing bar had been made with Monday’s big gain. If you missed it, or want to know what a bullish engulfing pattern looks like, just click here to review the blog entry.
Well, Spicy Pickle went two for two. SPKL gained 9 cents (8.4%), and it was on higher volume. Bullish engulfment confirmed. Today’s action is just as impressive…up 19 cents (16%) so far, after reaching a new high of $1.39.
What prompted today’s push? Progress. Spicy Pickle announced late yesterday that two more stores had opened. That brings the total of up-and-running unites to 26, with 12 more to be opened by the end of the year. A little under 50 more franchises have already been signed in addition to those 38. Am I surprised? No, not really. The company said they were going to do it, and based on the strength of their growth to date, I had no real reason to think they wouldn’t. But, if there was anybody out there doubting the expansion could or would happen, there ya’ go.
Undoubtedly many of you are now wondering about not only one gap, but two gaps on the chart. That’s a valid concern. I think the attraction to SPKL is in its long-term potential, but the short-term has probably been far better than most anybody imagined. The result is a stock with a lot of profits that could be taken by its investors. Though our coverage is for the long haul owners, I can’t say I wouldn’t understand locking down a little now. I’d still consider buying more (or again, or for the first time) on a good pullback though. In fact, the more I think about it, the original price target of $1.40 may not be aggressive enough. We’ll deal with that issue when and if we reach our suggested target, possibly by renewing the alert with different parameters. However, with a high of $1.39 already today, we may have to do just that pretty soon.