#$fio

Fusion-io (FIO) shares popped higher today on stronger than expected earnings. The key word in that sentence is "expected," as shares were badly beaten in 2013… especially into year end.

As I wrote about earlier in the month on tumblr, this made FIO a January Effect candidate. And so far, so good; expectations were very low into year-end, as bad news combined with likely tax selling. And this set the stock up nicely for the rally that is currently unfolding.

Whether shares are experiencing a dead-cat rally or the beginnings of a longer-term bottom is to-be-determined. No doubt, some consolidation and follow through would likely put this small cap back on investors radar again. -- AN

For the past two years, I've watched Fusion-io, Inc. (FIO) go from IPO darling and the next big buyout candidate… to a lost ship.  2013 was a rough year with lowered guidance, lost executives, and a much lower share price. Having traded the stock a few times, I was always tempted to buy…

In December I came very close to pulling the trigger in the mid $8's and that would have been a nice trade right now.  But we can't go back in time, and thus with the stock up 10 percent, I'm shying away for now.

BUT, from a curiosity perspective, I'm tracking FIO for the "January Effect," as it could be getting a lift from this phenomenon. In short, the January Effect is where stocks that performed poorly throughout the year are sold into year end for tax reasons or portfolio shuffling and gobbled up in January for a deal (often favoring small caps). 

Below are two charts: 1) A chart illustrating how bad 2013 was for FIO  2) A chart showing the stock lifting early in 2014.  No position.