GRDO - tag category postings

I have been watching GRDO for some time now and I suspect that it may be building up to a breakout of sorts.  The chart pattern as of this writing looks constructive to me and there may also actually be a pattern similarity to another stock I had on my watch list with symbol BEHL.  BEHL had a big breakout the last two days and I suspect we may see the same with GRDO. GRDO does have some more work to do price wise.  Perhaps another 2 or 3 weeks will be enough to build a breakout. It could happen sooner and the first indication will be that GRDO price is able to break up above the last 2 weeks trading range.

If you look at the chart to the left which shows GRDO on the top portion of the chart and BEHL on the bottom part of the chart there is a tendency towards a general pattern similarity.

I have drawn the red arrows indicating some of the major general moves on these two penny stocks.  In each case we did see at first a nice rally of about 1 month and a half in duration which then peaked and led to a slow and extended selloff.

But then new demand came in then price was able to rally back to the top of the trading range in BEHL where it eventually led to a big breakout as was seen today.  So in essence what we had in BEHL was a first price attempt at the top of the range and then two more attempts and a final successful breakout.

The pattern in GRDO is similar in the sense that now we are near the top of the range again and trading sideways similar to the way BEHL did just before it broke out.

The overall theme here is that if price fails to take out the previous lows, then it will turn around and attempt to take out the previous highs.  We could be near that stage now with GRDO.

Of course all of this could be invalidated if price does not remain constructive in GRDO the next couple of weeks.

GRDO happens to be in the business of identity theft protection.  Clearly this is a huge potential market and also judging from the success of LifeLock a very profitable one.  LifeLock is basically an insurance company, and I suspect a very cash rich business.  I think lifelock is growing at about 25% per month and does north of 100 million in revenues per year.

So clearly we have a very big opportunity here. It is that kind of ‘pie in the sky’ potential that tends to light a fire under some of these penny stocks sometimes.  Lets see if GRDO can build some more momentum from this new identity theft biz wave.

Guard Dog Inc., a penny stock which trades on the pink sheets may be setting up for a breakout later this year.  I cannot tell you that this is the perfect setup or that it has aspects that make it look like a potential blockbuster trade, but at least for the moment this penny stock looks like it has some good things going for it. Lets look at the chart shall we?

There are a couple things that catch my eye on the GRDO penny stock chart.  For starters we see that GRDO had an initial rally way back from the lows in January 2009. This was a pretty decent rally with pretty good volume and showed us the first sign that GRDO is a stock that is capable of getting a rally going showing a decent sign of strength.

After that GRDO went into a long sell off until the mid May time frame, but significantly it was NOT able to break the initial lows set way back in January of 2009.  So basically we can call this a successful retest or double bottom of sorts.  This is a simple point but still quite a significant one since the stock has shown us that it still has some gusto left to make a new attempt at the old highs.  If we were dealing with a dead stock, then GRDO would have fallen below support on the retest and then just kept flat lining in a slow spiral of death.

But that did not happen.

Instead we find ourselves with a new rally now with respectable volume. The classic definition of an uptrend.  The rally, while somewhat choppy has taken us into previous resistance, but still has been keeping support on the uptrendline (drawn in white).

One of the greatest secrets that I have learned about stock price movements whether they are penny stocks or big cap stocks or forex pairs or commodity futures is this. When a stock fails to take out the previous lows, then it will in most cases turn around in the other direction and try to take out the previous highs.  Think of it like a tiger in a cage at the zoo. He cant get out from the right side of the cage, so he turns around and paces back to the other side of the cage and tries to get out there. If he can’t do that then he will turn around again and try to get out from the right side of the cage again. Maybe this is not the best analogy, but you get the point.

PRICE has a life of its own and will act like any other natural force, even in the penny stock marketplace.

So GRDO did the price test of previous support and now is oscillating back up to the top of the range, or at least one would hope so.  That scenario is only valid as long as GRDO is able to hold the short term white up trend line. That remains to be seen, but so far at least it looks constructive.

Incidentally this entire price chart pattern structure that you see in the chart above is at least SOMEWHAT similar to the price pattern structure that EESO had before it shot up to .05 from sub penny range. I am not saying that GRDO is going to do the same thing as EESO, but I can tell you that if GRDO keeps this uptrend going and then gets above that top range resistance level of .004 to .005 range, it could set up a very big move up maybe similar to what EESO did, but that sort of speculation is way too early to do right now.

For now lets see how this minor uptrend holds, or not.