Snipp shares dove anew Tuesday on news of disappointing earnings for the first quarter of 2016. It is most perplexing to me that a company that has been winning new business with so many blue-chip clients cannot turn a profit. The inescapable conclusion is that Snipp Inc. has been poorly managed.  Talk with the CEO, Atul Sabharwal, however, and you will come away convinced that he knows what he is doing and that he will eventually bring Snipp’s bloated operating costs under control.

On the other hand, it is hardly reassuring that Snipp put so many shares in the hands of Canaccord via a “bought sale” arranged last year. One might surmise that, ever since, the Canadian investment firm and its close friends have been unloading Snipp shares into every rally. I continue to hold a third of my original position nonetheless, since, at least from a marketing standpoint, Mr. Sabharwal seems to me like a highly capable innovator.  If it were otherwise, the company would not be winning new business with so many blue-chip multinational firms.

From a technical perspective, the stock’s slippage beneath a key ‘midpoint Hidden pivot’ at 0.1832 leaves it vulnerable to a fall to 0.1298 over the near term (i.e., within 3-4 weeks). Worst case if that ‘secondary’ pivot should fail would be 0.0764. As noted above, I will continue to hold Snipp shares speculatively because I am unable to imagine the company going belly-up. If it doesn’t, Snipp appears to have laid the groundwork for solid growth and strong profitability somewhere down the road.  Snipp itself is optimistic this will happen, for reasons that are spelled out in the latest earnings report. Click here to access it. _______ UPDATE (July 4): SNIPF has performed exactly as forecast, falling last week to a 0.1287 low that came within a tenth of a cent of the target I’d provided nearly five weeks ago. As implied, if it cannot hold these levels, it will be vulnerable to further slippage to as low as 0.0764. _______ UPDATE (July 11, 7:56 p.m. EDT): The stock today slipped well below the Hidden Pivot support at 0.1298 noted above. This is ominous, since it puts in play my worst-case target of 0.0764, first broached here six weeks ago with the stock trading near 20 cents. _______ UPDATE (July 19, 7:34 p.m.): Today’s unaccustomed upthrust generated a bullish impulse leg on the daily chart by slightly exceeding an ‘external’ peak at 0.1478 from June 30.  This is the most encouraging price action we’ve seen since November, when the stock ‘impulsed’  above a small peak recorded almost exactly a year ago. It proved to be a false signal, as this one might; but even so, the rally is reason for optimism, however moderate.