It’s a Kodak moment for investor insanity on Wall Street — and the enormous run-up in Eastman Kodak’s stock is yet another example of the current market frothiness.
Shares of Kodak are still up about 530% in the past five days — even after big slides at the end of last week and a drop of more than 20% Monday — following the news that the government will loan it $765 million to help produce drugs as part of a new pharmaceutical unit.
But Kodak won’t suddenly become the next Pfizer or Merck through this investment. While Kodak has experience producing chemicals for the film business, there is no guarantee that the company can easily morph into the decidedly different business of making pharmaceuticals.
Plus, Kodak (which went bankrupt in 2012 and emerged from Chapter 11 a year later) has a history of trying to cash in on other hot trends. It launched KODAKCoin in response to the bitcoin and cryptocurrency craze in 2018, for example.
But that sugar rush may not last long. The big slide in Kodak’s shares over the past few days could be a sign that short sellers — investors who bet the stock will go down — are borrowing more shares and selling them, pushing the price lower in the process.
Other investors may be looking to lock in huge gains from the past week and are now dumping shares, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, in a report.
Either way, the quick rise and sharp pullback in Kodak stock is yet another clear example that retail investors are trading for the short-term and not buying for the long haul.
Thornburg’s Brady described the popularity of stocks with poor fundamentals like Kodak as an example that the stock market has “jumped the shark.”
Eastman Kodak Company is a global commercial printing and imaging company with technologies in materials science, digital imaging science and software, and deposition processes.
The Company provides hardware, software, consumables and services to customers in graphic arts, commercial print, publishing, packaging, electronic displays, entertainment and commercial films, and consumer products markets.
The Company operates through seven segments: Print Systems, Micro 3D Printing and Packaging, Software and Solutions, Consumer and Film, Enterprise Inkjet Systems, Advanced Materials and 3D Printing Technology and Eastman Business Park.
The Print Systems segment comprises two lines of business: Prepress Solutions and Electrophotographic Printing Solutions.
The Micro 3D Printing and Packaging segment comprises two lines of business: Packaging and Micro 3D Printing.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 7.27.
The projected upper bound is: 27.09.
The projected lower bound is: 3.29.
The projected closing price is: 15.19.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 33.2195. This is not an overbought or oversold reading. The last signal was a buy 13 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.55. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 46. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
EASTMAN KODAK CO closed down -6.910 at 14.940. Volume was 439% above average (trending) and Bollinger Bands were 1,556% wider than normal.
Open High Low Close Volume 21.130 21.160 14.740 14.940 47,189,248
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 11.90 4.28 3.13 Volatility: 1,084 511 275 Volume: 76,603,872 15,536,947 4,089,362
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
EASTMAN KODAK CO is currently 376.7% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
Our volume indicators reflect moderate flows of volume into KODK.K (mildly bullish). Our trend forecasting oscillators are currently bullish on KODK.K and have had this outlook for the last 5 periods.