Those who have been hanging around Spike Trade for awhile probably remember watching Alex and his past epic trading of CPST, an alternative fuel company. It was a multi-month drama–full of reward, bruises, and redemption. As we watched Alex wrestle with this small-cap rocket, I realized we were watching a master at work, picking entries and timing exits skillfully. It was very educational, and maybe one day Alex will take us through another long-term trade, so generously sharing his thought processes.

Flipping through my charts yesterday, I stumbled on CPST again. I noticed that it has avoided complete disaster–though plunging from a high of $4 to a low of $0.45. After several months of sideways action, we’re now recapturing the 39 week EMA. This is about as clear a Fallen Angel pattern as you will see; so it may be in our best interests to pay attention. The weekly chart clearly shows support around 1.14 and resistance at the 5-week EMA around 1.20. The daily chart shows price is ST/OB and it looks like a squeeze is developing. Target is around $2.50. Personally, I’ll wait until the short-term indicators sag before taking a shot; and for now it goes on my watch list with a glow of anticipation.