Pacific Ethanol - The bleeding is likely over

The last few weeks have been painful if you were a long holder for PEIX. With the whole market coming down and news that corn futures are up some and Brazil is offering an export credit, PEIX was an easy target for profit taking by some of the big boys.

At the very end of close on Friday someone purchase about 1 million shares. This was likely someone covering their short position and going long.

It's also likely not a coincidence that we've gotten back to levels near Q2's closing price. If we would have been in the mid to low 20's the last day of September we would be looking at around an $8 million hit to earnings.

It's clear the pushing down has ended as we've seen a pretty steady last few days. Likely what will happen is the price will hold around this level until October and then start its run upwards again.

Today's weekly Ethanol Inventory report was positive for PEIX as inventory has dropped. GPRE and REX were both up today on the news, but PEIX will be held down through September (end of Q3) before we likely see this rise due to the above mentioned desire to keep the FMV adjustments to a minimum.

Next week's Ethanol Inventory report is likely to be even better due to some exports being counted that were just sitting in the Gulf Port waiting to be exported, but due to technically being on American soil they were counted.

I can't stress this enough - this is likely one of the best buying opportunities PEIX has had all year. It's certainly not a guarantee, but with the indicators mentioned, it's hard to ignore that this will likely go back up -

• Large 1 mill share purchase end of Friday signaling potential institutional investment. 
• Price hold-down to not get killed by Fair Market Adjustments on outstanding warrants.
• Ethanol Supplies declining. Next week should be even better!
• GPRE and REX up today.
• 3 day price stabilization indicating the bleeding has likely stopped and we're now just awaiting Q4 before climb back up.

EDIT (4:26PM MST 9/24/2014):
It should also be mentioned that we should expect a Fibonacci retracement. A 62% retracement of steep gains is typical, expected, and actually healthy. We hit that around $15.60 and it's held nicely. The same retracement happened when we fell to the 10s earlier this year.