$GEO - deep dive
For how long will the music in $GEO continue?
On August 15th 2022 Investing.com reported that Michael Burry from the Big Short sold out most of its positions but kept a substantial holding into $GEO that invests in private prisons and mental health facilities.
I quickly made a basic analysis and posted this chart on Twitter on Aug 16th 2022 :
Since the break out in November a probable new trend has set in with higher highs and higher lows now confirmed. Recently on November 29th 2022 I posted a follow-up chart on Twitter (click on link).
The monthly chart in below post seems to suggest there is a 5-year cycle unfolding.
W.D. Gann’s rule number 8 mentions: “Add five years to any top, will give the next bottom of a five-year cycle with about the same average fluctuations. …, add five years to any bottom, and it will give the next top with the same average fluctuations…”
W.D. Gann’s rule number 2 also gives the general structure of a bull market: 2 years up, 1 year down and 2 years up.
Is Michael Burry following Gann?
From a longer-term uptrend the “music” in this stock may continue but there is no guarantee it will. Fold back’s as shown in above chart (dotted blue line) may cease to function after some time. It is still possible this stock is still in a longer term downtrend as shown on the monthly chart.
Currently GEO has not reached yet the normal price earning as seen over the last 20 years. In Q4 of last year and in Q1 and Q2 of this year GEO did beat the earnings targets expected by analysts, but the recent Q3 2022 targets were missed by $0.08.
So, take care. No advice that the current rally will continue. There may be dips on the way or the rally may end sooner than expected. Anomalies can occur, cycles can contract, extend and invert. So, always watch the chart in front of you. The premium subscribers may see the monthly and daily charts with more perspective on the possible scenarios.
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