Case study, Average-In (avgi) strategy: Vertex (VTNR)

Another example of the average-in price strategy is Vertex Energy (VTNR).  ShinyPennyStocks.com recommended Vertex Energy (VTNR) shares be purchased via an Average-in strategy on 4/1/2021.  The strategy enabled a subscriber to purchase a full position for $1.54 per share, the average of the three avgi limit prices.   See chart below. The instructions to average-in to purchase VTNR shares were as follows: 

  1. Purchase 50% of stake at or below $1.70 price.  The share price traded below the $1.70 limit from ShinyPennyStocks.com’s initial 4/1/21 recommendation until 5/14/21.  Note. Since high for share price on 4/1/21 was $1.58, subscribers who purchased initial 50% on date of initial recommendation and followed average-in instructions have a cost basis of $1.41. 
  2. Purchase 25% of stake at a limit price of $1.46.  Avgi limit order was filled when the share price subsequently traded as low as $1.39 on (4/12/2021). 
  3. Purchase 25% of stake at a limit price of $1.30.  Avgi limit order was filled when share price traded below $1.30 for a majority of the days between 4/13/21 and 5/12/21.

By paying the maximum limit prices as per the average-in limit instructions, a subscriber’s cost basis for a full position was reduced by 12.3%. The share price subsequently reached a high of $13.72 on 7/1/2021 an 825% increase from the $1.49 average-in share price. Even after a pullback from the high to a low of $4.05 a subscriber had a 198% paper profit at 12/23/2021.

Since price of a VTNR share pulled back sharply from the 2021 high due to profit taking, ShinyPennyStocks.com amended its average-in instructions to purchase the shares on 11/16/21 with a $4.30 limit price for a 50% stake. Subscribers through 12/22/21 were able to initiate a 50% stake since shares traded at or below $4.30 for a majority of the days from 11/16/21 to 12/22/21. On 12/27/21 limit price for a 100% stake was raised to $5.00.

SPS’s avgi recommended that a 50% stake be acquired in VTNR on 11/16/21 at a limit price of $4.30 after the share price appeared to have bottomed at $4.28 on 10/26/21.   The share price holding above the low and trading in a narrow range through 11/16/21 is why the avgi raised its limit for VTNR to $4.30 for a 50% stake.   See $4.28 with green dotted line on chart below.  The avgi recommended a 50% stake since the share price could have declined to $3 or possibly even $2 based on the downward trajectory from the June 2021 high of $14.32 through October of 2021.

Due to the shares being under accumulation and trading range in a $3.94 to $6.22 range through December 26, 2021, (high of $5.21 and low of $4.05) the probability of the share price holding above $4 had increased considerably.  The behavior of the share price from 11/16/21 to 12/26/21 indicated that a new uptrend for the shares which have the potential to eclipse their 2021 highs had begun.   Therefore, the limit price for a 100% stake was raised to $5.00.