Happy Humpday mi amors!
Let’s kick this one off with American Airlines (NYSE: AMR) which was alerted yesterday pre-market where I told you to keep an eye out for the mid .50 ranges for an ideal entry point. AMR hit a very roachy all you could gobble up buffet of shares between .56-.57 right before lunchtime and then went on a little sprint to hit a high of .65 before settling down to close above .61.
A lot of AMR traders and investors are still hoping that the judge handling the case will reject AMR’s request for bankruptcy protection, and some speculate that with $29 BILLION in assests, $4 BILLION of that being in cash that AMR will withdraw their request since it really does seem like this voluntary chapter 11 move seems to be a power play against the unions.
AMR is also on the NYSE’s theshold securities list which means that shares that have been borrowed for short selling have not been returned, so of course the bulls are at the ready to try and force a massive short squeeze or as we like to call it, “MOASS COMING!”
News courtesy of bloomberg.com http://www.bloomberg.com/news/2011-12-14/nyse-threshold-securities-for-dec-13-table-.html?cmpid=yhoo
Support for AMR comes in at .50, and resistances lies ahead at .65, .75, and $1!
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Onto our next roachy chapter 11 stock, or dare I say, “former chapter 11 stock” Washington Mutual (PINK: WAMUQ), a lot of shares were gobbled up during yesterday’s trading in the .08s and .09s but I would still keep an eye on the support level of .077 – .08 as prime entry since there is a trading gap that was left on the charts, but with the consolidation of shares between .08-.09 I am not going to hold my breath for it.
WAMUQ has a rather interesting reorganization plan and a rarity amongst companies that emerge from chapter 11 bankruptcy protection. Holders of common stock will retain 30% of their equity in WAMUQ. Normally when a company reorganizes after Chapt. 11 common shareholders tend to get wiped out, and their equity stake goes kaput but commons will some of their value.
They will most likely reverse split the stock, but this isn’t your typical stinky pinky reverse split where the company splitting has zero value and only does an R/S just to dump more shares into the float and O/S turning their stock into a virtual ATM for themselves. So if my roachy senses are correct there will be some investors that will be buying more WAMUQ common stock in case of a reverse split, so that they can hold a large enough position and upon split they will have the same if not more shares than their original purchase price years ago when common shares of WAMUQ were trading well above $3. Hey at only .09 per share now that’s a freaking bargain haha.
Support for WAMU comes in at .07, and resistances lies ahead at .10, .12, .15, and .20.
Senorita “Where’s my coffee?” Roachita.