GTSO - Bottom Alert - Bullish Hammer Reversal?

GTSO is down from $5 a share to a close of $.194 today. The stock was over $1 last month, $2.00 the month before that, and looks primed for a reversal at some point. The stock has a 50 day moving average of $.55 and a 200 day moving average of $2.21. Those two averages show the depth of GTSO's drop and the potential the stock has should it decide to rebound.

GTSO is also involved in gold mining and with gold prices continuing to soar this could benefit the company going forward. You can read more about this at their website: http://www.gtsogold.com/investors.html

Other than being oversold, today's hammer formation could indicate a possible trend reversal is coming.




I took this image of a hammer formation from the stockcharts.com website, notice what happens when a bullish hammer formation comes (link below)


From stockcharts.com: The Hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session. However, the strong finish indicates that buyers regained their footing to end the session on a strong note. While this may seem enough to act on, hammers require further bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further buying pressure, and preferably on expanding volume, is needed before acting. Such confirmation could come from a gap up or long white candlestick. Hammers are similar to selling climaxes, and heavy volume can serve to reinforce the validity of the reversal. (Click here for the link to this excerpt)


After such a dramatic drop in price I think GTSO will have a sharp rally at some point. Perhaps tomorrow we will get the bullish confirmation that stockcharts talks about above. Or perhaps the stock will continue its losing ways. Nothing in this market is guaranteed. But we do know that these stocks can rally sharply once their trend changes and getting in before that rally occurs can be a very profitable trade.