 Welcome to the channel. This is ReliableRooty. In this video we're going to fill a viewer request from Mr. Crow on HPK High Peak Energy. Now I can see they are a profitable company but it is a newer IPO so not a lot of financial data to go on. So that's going to take our stock analyzer tool out of the equation. But I do appreciate the attempt in the profitable company. But nonetheless I'm not going to dive into too much financials. But nonetheless thank you for the viewer request. I hope to get more of these viewer requests in the future. I love doing videos on this and it gives me an easy way to bring a non-biased opinion to the equation. So before we get into this video I'm not a licensed financial advisor. Everything in this video contains only my opinion and it's for entertainment purposes only. I have no personal holding in HPK High Peak Energy and I'm not sure if it's in my index funds or not. But if it is okay that's my only tie to the company. But nonetheless just stating my opinion. Nothing more nothing less. Okay so going into this profit margin is 24%. Net income year to date 106 million. Revenue 439 million. Price of sales a little bit high. Negative free cash flow. I would want to be careful with that. It looks like they are paying a small dividend. Not taking up too much. Only 18 million. So out of their net income that's a small amount. They have pretty solid gross margins. I am attracted to this gross margins especially with a newer company. I'm focused majority on that profit or that gross margin. Because that's going to help them grow much faster and become a sustainable business for a long-term model. Return on Vest capital year to date negative 63%. But it is a newer company so I don't I'm not too familiar with that. We are gonna hop over and I'm going to point out why we're not going to go over the stock analyzer tool. And simple enough I'm on this revenue tab right here 2019. See we only have three years of data right here. See this large increase. Huge increase. And then just a massive increase. Just massive. Is there going to be a realistic way to go in and project a valuation for this company? No. No there's not. And me personally I'd stay away from these companies but I know that there is potential in them which is why we're going to go to the chart. And I got a couple points that I want to get to cross. So right here I am on Yahoo. And you see how from 2018 pretty much to August of 2020 we hover around this $10 flat. We get not really much movement at all. It's because when they IPOed in 2020 they used a SPAC merger that is basically merging with a SPAC to launch public. And what's interesting about that is the year 2020. Now what corresponded in the year 2020 with COVID all-time low interest rates all-time low barrier to entry. This is why in the year 2020 you've seen a lot of newer companies IPO because the barrier to entry the window the opportunity was there. It's not that oh look at all these new IPOs I just out of the blue there's no reason for that just a coincidence no. There is a reason for everything and companies seeing the opportunity and they took advantage of it. Now some IPOs good IPOs some IPOs pretty bad IPOs. It's hit or miss but nonetheless this company actually is profitable. They are in the oil and gas company you know that's that's been hitting pretty good right now. So they they picked a pretty good time to entry and that timing paid off for them pretty good especially for now with the you know earlier this year gas was just ridiculous but you know that could also be a potential catalyst that they are benefiting off of right now are they going to benefit into that going into the future. That's what you're going to have to ask yourself. So we are going to skip away from the financials I kind of dove into that just a little bit but yeah in terms of financials and valuation we're going to skip over that. So we're going to go over the trading view. Now you can see we do not have the SPAC information we have the exact date that they go public we're on a day chart every candle represents a day. On August 24th of 2020 they IPO'd. Now since then they had a pretty good tank and price right there let's go see what this percent drop is. Okay roughly 50% drop. Let's just get a long-term trend line set real quick I can see we have one two three four five six seven points of contact I feel that's a pretty realistic trend line right there I'd be surprised if many people had that trend line set differently. Maybe if you were taking excluding this point of contact maybe they had it set a little bit like this and if I were to pull that all the way is over okay we don't get a point of contact right here. I would just think that a lot of people have their have their trend line set more like this. That would make sense to me so we're going to look at this drop right here. So I'm going to take pretty much the high price right there and we're going to take top and move bottom move and look at that guys. Wicked directly through my full extension. Would you look at that? What does that run right there? Had you bought down here at the bottom? 415% run and you could have timed it perfectly. Look at that on the money on the money. Guys this is why it is important to put a fib tool top of the move bottom of the move. Now let's say you were just buying this trend line you can see we have a nice trend line put through this during the time you probably could have had this set like this. Give or take look at this entry right there whoever bought right there smart man and if he held it for a full extension he got it and if he identified that full extension he sold it and he saved himself so he ran this up 400% and he saved himself a 71% loss now with this drop right here we have our left leg Ripley stop lay down we have a left leg we build our neckline we get our right bottom we get our extended right leg now with any extended right leg what do you got to do you got to back test the neckline let's just mark that neckline out and let's get rid of this fib tool where do we drop on this 71% drop literally on the money guys I can't make this shit up this is a viewer request and I'm just going over a raw chart right here if I were mapping out this we got a roughly two two dollar and 25 cent risk reward here so if I was putting this up to 25 we're looking at 850 and we're looking at 10 10 right around in there right around in there actually it's a little bit higher and look at that yeah worked out on your two-to-one risk reward absolutely gorgeous so you got in off this trend line you sold the full extension you bought the back test the neckline you ran it for a two-to-one risk reward what is that percent gain right there you ran up for another 81% there's so many ways that you could have played this this is great information right here guys and you're gonna want to stick around for more because I got more good information go over on this chart so nonetheless let's get rid of this this back test of the neckline trade right here pretty interesting at this a let's just clear the whole chart I mean you guys got the point across right there pretty extraordinary to say the least let's get our long-term trend line off over there now with this drop okay now if I go top the move bottom move what do I see okay getting some good action right there we retest the old-time high and you see how this doesn't really match up really well you see how this doesn't really match up really well kind of does but I'm going to actually play around with this because you can see that this clearly wasn't trading off valuation it was clearly just trading off of a chart if you have a hard time understanding that I mean the action that this gets at the full extension people were not trading this during this time based off valuation they're trading this for the full extension clearly you get this huge sell-off now here's another reason right here we have our trend line we have pretty parallel trend line well if I take my tops here you see how my upper trend line and my lower trend line are not parallel well if I take that from the IPO price and I run this through these tops right here okay now we actually have a pretty parallel channel everything above this I I disregard don't take any regard into it so actually where I'm setting this fall I'm taking where we're bullish bullish bullish bullish bullish bullish bullish bullish bullish okay first sell-off this is where I want to take that extension we're gonna slide this all the ways across okay now we're talking direct correlation off my first extension let's zoom into this I mean this is this is just gorgeous right here direct correlation off my first extension we gap up over my first extension we back tested on the money we run get rejected at my second extension we hold at my first extension we run back up to the first second extension we hold at the first extension we crack here we go here we go guys told you there's some good information here we crack we back test the bottom of my first extension and we sell off now what's let's talk about this drop of it yeah you guys aren't ready for it let's talk about this drop we have our initial fall boom we have a wave 2 we have a wave 3 we have a wave 4 you see how this wave 4 back test here's the bottom of my wave 1 never set to close above it my wave 4 back test the bottom of wave 1 where we get a wave 5 you guys see that 1 2 3 4 5 wave structure following that wave structure we got it clear a b c abc retracement following the abc retracement we have our one no no no mess it up we have our 1 2 3 4 back testing the bottom of my wave 1 I'll mark that out for you guys you see that bottom of wave 1 2 3 4 where we get our wave 5 reverting back to my long-term trend line that you should have marked on your chart look at all the action right there direct correlation we set a double bottom right there comes in direct contact at the end of a five wave structure abc and a shorter term five wave structure reverting down to my long-term trend line now the way I would look at this is this is one solid wave so if I were to clear that whole chart right there that I went over this is one big wave reverting down to my trend line where we are currently in a retrace what is my retracement I'm focused on my 6 1 8 well currently we're setting a close to look at this guys we gap up right above my 3 8 2 we set a close right on my half right on my half is that a coincidence I'll leave that up to you guys this side nonetheless I'm very focused on my 6 1 8 and my 7 0 2 if I see any type of double top come in here I'm playing this this way now I'm not I'm not in this stock but if I was that's how I'd be playing it if I see a double top I'm taking that as a wave 2 now we got some gaps to be filled what's our price action right here what's our price action on the next gap what's our price action on the next gap what's our price action at the all-time low price if we get a crack at this price I'm looking for a wave 3 after a wave 3 I'm looking for a wave 4 to back test the bottom of wave 1 nothing changes it's just on a longer time frame nothing changes and after a wave 4 I'm expecting a wave 5 what's my percent drop from the very top 50% drop roughly from the top from the top of my wave 4 what's my wave 5 gonna look like let's look for a 50% drop roughly let's mark that with a line right there now we're gonna go we're gonna look to the left of the chart here in a second but nonetheless let's take this fib tool off and let's take a look okay I see a here's my double bottom that went right off of this trend line this is my longer-term trend line right here's a double bottom off of it left leg double bottom extended right leg get a back test the neckline meets right in at there well it gets better guys just wait let's clear the whole chart let's draw this up here's my initial fall let's free let's not forget this is still in effect if we don't get price action at that 702 this this full extension is still in play this can still turn bullish just because I'm talking about a five-wave structure that could transpire doesn't mean that this doesn't turn bullish this could easily get a full extension are you guys gonna go buy that to get the full extension right now if you're if you're buying it after this after you see this video you need help I'm just stating my opinion here but this is that is a bull case scenario nonetheless I would be very alarmed to see you the price action at a full extension there let's take that off what else do I see I see a left leg left bottom we build a neckline we get a right bottom we get our extended right leg where I'm then going to look for a back test the neckline since we got our extended right leg have we back test this neckline 1173 where was my five-wave structure ending at around a 984 I believe it was because there is my neckline right there here's your buying window guys you want to buy it up here and hope for a full extension or do you want to buy it down here at the back test the neckline I'll leave that up to you guys this side let's go over and look at this had I told you this could transpire over here when we had our left leg neckline double bottom extended right leg back test the neckline yes you guys see the point that I'm trying to get across right there so there's a bull case scenario there's a bear case scenario yeah in terms of charting everything is supply and demand are more people going to want to buy or are more people going to want to sell it's trading off of a chart right now so I'll let you guys decide on which way you want to take that this is going to complete my video oh we were going to go check and see if I'm actually a holder in this company here's the mutual funds I actually don't know nope Vanguard Russell but I don't hold that I hold Vanguard Total World Stock Market Index Fund doesn't look like I'm a holder of this company what's the oh my gosh 89% insiders let's go take a look what the insiders are doing purchased at 21 61 for $50 million worth of shares on August 22nd that was three days ago yeah you think he you think he's gonna dump heavy on a full extension are you gonna trust that insider not to dump his shares on a full extension yeah I'll leave you I'll leave that up to you guys this side I hope you guys enjoy the content in this video thank you for the viewer request and yeah send me more viewer requests I have more than welcome more than willing to do videos like this and I enjoyed a lot this was a lot of fun making this video and we'll see you on the we'll see you guys on the next one