I'm going to feature a new stock of the week as often as possible. Let's dig in.
After stellar earnings Rocket Fuel (FUEL) traded up ~25% at one point Thursday. What really interests me is on Wedneday Intel took a small 1.5% stake in the company. Before that news, I sort of just figured FUEL was some all hype no substance junk just based on how it traded. I doubt i'm alone in that assessment. Now, with a reliable chip maker like INTC betting on them, the business seems pretty legitimate.
This isn't to say just because of Intel the company has legit prospects now(who knows), just that it does alter our perception in a meaningful way.
Just a few deets on the business: the revenue growth is strong at about 60% clip Y/Y last quarter, operating cash flow is improving but still negative, and the margins are dropping.
We see the nice wedge base that had developed since August. The breakout measures to 23 and there is an open gap in the 24's. It's worth noting there are only 30M shares floating with a pretty size-able short interest. That said, another rip higher could lead to another share offering.
I'd like to use further weakness closer to the breakout area to get long trading against the gap or pivot points.
Trade 'em well
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