Gevo is Hangin' By a Thread (GEVO)

It was already hanging by a thread, and then only because it bounced back from an early-November plunge. But, with the action we've seen from Gevo, Inc. (NASDAQ:GEVO) since that now-failed recovery effort, it's pretty safe to say GEVO is beyond help/hope, if it falls under one more big line in the sand.... and it's looking like it's only a matter of time before that happens.

For those not familiar with it, GEVO is renewable fuels stock. Specifically, it's devised a way to chemically manufacture isobutanol, which is kind of like a distant cousin to traditional fossil fuels or corn ethanol, but a surprisingly viable alternative source of energy. The challenge for Gevo, Inc. is simply that not a great number of users are familiar with or are equipped to use the fuel source.

The company details aren't the important part of the Gevo story right now, however. What's important here is the story the chart of GEVO has been telling, and how close traders are to mentally (and therefore physically) pushing the stock over the edge.

First things first. The big bearish gap Gevo Inc. left behind in early November? That was driven by last quarter's lackluster results, with just a pinch of pessimism about the future. It was a one-day hit though, as GEVO shares simply drifted sideways until...

... November 15th. That's when it was announced that Coca-Cola would be using a Gevo technology to turn plastic soda bottles into car parts. The euphoria lasted a whole day. Given 24 hours (less than 24 hours, actually) to think about it, traders changed their minds, in spades, Fast forward to today.

Had the reversal from last week's pop not been so hardy and so decisive, we might be able to overlook it. The sellers weren't playing around with GEVO though. They've spoken loud and clear, then and again now - there's nothing to look forward to here... not even the deal with Coke (which in the grand scheme of things isn't actually that big of a deal).

With all of that being said, there's still one last bastion of hope for Gevo Inc., and that's the support line at $1.35. That was the floor and the source of the recovery late last year, and has thus far been a line in the sand throughout the current bear attack. The bears aren't letting up though, and one more good stumble could do the trick. Take a look.

Bottom line? GEVO isn't past the point of no return and into bear-trade (shorting) territory yet, but it's close, and deserves a spot on your watchlist.

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