RELV

Reliv International:

Makes nutritional and weightloss supplements, and sells them through an Amway-esque group of comission only salespeople.

Charts
General info

Looking at it's chart, we are at a level of very significant support. It is at the nape of a three-year double-bottom base, and at its 200-day moving average. Its downside cutoff is 11.

RELV just posted its numbers yesterday (5/4/06), and they beat the street by a penny, with 18% growth. Top-line was just shy of estimates, which means they sold slightly less, but at a better margin than the street expected.

Response to these numbers has been very muted. Up yesterday by 1.5% in slightly above-average trade, then gave it up today in lower than average trade.

I expected a make-it-or-break-it announcement, considering how close the stock is to its support level. What is up? Well, I'm not entirely sure, but this is what I think:

1. There are only three analysts covering this small-capper.
2. The numbers were good, but not good enough to bring new attention to this stock.
3. There was a lot of selling going on over the past three months.

I'm looking at this as insiders liquidating some of their gains from the 2.5 year run-up. That would explain the volume, and also the reticense for the stock to move higher after yesterday's good news.

GOING FORWARD

Hard to say. I still believe in this stock. Good growth, good industry, not too much exposure yet. The mental stop-loss on this stock is a close below 11, so the downside is very limited.

I've bought this stock in two tranches. One at $12.30 and another at $11.30. I usually don't average down, but as I said, I like this stock based on both fundamentals and technicals. If I were not already in, I would buy more.

RELV looks like it may be forming a bowl formation. Its lows have stabalized, and its highs are decreasing in a curve, not a straight line. The stock has refused stubbornly to close below its 200-day.

This is still a critical time. The left side of this possible bowl is in very high volume, which bodes ill for the right side. That said, the downside is very limited (as I've said three times now, I know). A close below 11 is a failure, and a sell sign.