Good Morning!
It’s time to get back to work now that most of the recent tantrum has worked its way out of the market’s system.
The ideas will start flowing a lot faster now as traders like us race to grab the fastest-recovering positions FIRST.
And from everything I can see, Spiral Toys Inc. (STOY) could become one of the fastest post-correction plays around!
The chart looks like it turned yesterday morning. If so, check out all that blue sky left for those willing to ride the rebound:
It’s not a complicated technical story. STOY got more than half its market cap knocked out of it in the correction. A lot of stocks are in that position.
But yesterday gave STOY a fresh shot at revenge. Maybe we just saw a long-term “inflection point,” maybe not.
All I know is that between STOY’s cool products and recent progress toward MONETIZING it, the bears got out of line!
Check out the CEO right here. Watch his face. Look how enthusiastic he is about the revenue ramp. This guy is PUMPED . . . with good reason.
You see, STOY is all about bridging the mobile computing revolution with fluffy kid toys. They want to be the Apple of teddy bears!
Think of an iPad shaped like a plush animal. It can watch your kids, tell them stories, deliver messages. (VIDEO)
STOY considers it a “killer app” in the Internet of Things revolution where you can program everything around you.
For just $40, kids get an interactive friend. Here they are for sale at Amazon. Hey! Here’s one at Walmart itself!
Yeah, STOY has already cracked the biggest retailer on the PLANET. They’re rolling out toys across 3,800 Walmart stores for the holidays.
The first manufacturing run of 60,000 of these $40 toys sold out immediately and now there’s another 500,000 ready to go.
Sad to say, orders were already DOUBLE inventory back in May. STOY could have the next Cabbage Patch craze on its hands!
Revenue is already ramping up into the 7-digit sweet spot, which makes the current market cap look mighty small.
My guess is that STOY was another casualty of the correction and the current “ground floor” price isn’t going to be around long.
Here’s an analyst who swears STOY should be worth closer to $1.50 in the long haul. For us short-time traders, the chart is instructive.
A 28% retracement move would only take STOY back to the 50-day line, which is coincidentally a classic “reversion to mean” story.
From there, the sky opens fast! The 200-day line is a full 55% away from yesterday’s price and the pre-correction peak is . . . even sweeter.
Does STOY have that kind of potential today? If I really did call the turn, I think the outcome will be pleasantly surprising for a few of you!
But we’ll never know if you don’t get STOY on your screen, do a little more homework (this page rocks) and GET BACK TO WORK!
Sincerely,
Michael Reef
yourstockguy@gmail.com
