Barring any gap of more than 3% in either direction, I will be adding CBK as an active short trade at the open tomorrow. As seen in the daily chart below, CBK has recently broken down from a bearish rising wedge pattern and while the stock was down big earlier in the trading session today, it managed to recoup a good percentage of it’s losses and close at a level which still offers an objective entry even for shorter-term/active traders targeting T1. As small as that distance looks when eyeballing the chart, keep in mind that CBK has put in a monster run of well over 500% since bottoming just 7 months ago. In fact, T1 is about 10% below current levels.
Zooming out to the weekly chart, we can see that CBK has a history of getting ahead of itself during uptrends, as noted by the 3 extreme RSI readings over the last decade. The previous two readings of such levels (77+) have both lead to drops of over 90% in the stock (yes, 90%+ drops) although right now my preferred swing target is T3 (3.80), which would be a drop of 31.8% from current levels (although the $2.00 area is a possibility for an additional target if things start to get ugly in the broad markets). Since the entry price is yet to be determined, I will post some suggested stops tomorrow. However, as a general rule, consider a stop with at least a 3:1 R/R to your preferred target.
