There was a massive breakout Wednesday on heavy volume by ADC Telecommunications, Inc. (ADCT), a new stock I want to talk about today. As you will see on the chart, the big downtrend took it from 17.50 down to 2.50 during the bear market in a 5-wave decline, peaked out in early March and went from 2.50 to up about 8.50. Over the course of the last 90 days this stock was in a sideways lateral or coiling type pattern.
Today (Wednesday), suddenly after drifting lower for the last couple of weeks, this stock gapped up on a surprisingly strong earnings report and profitability report, jumping 2.02 or 29.28% on 17.7 million shares on the second heaviest volume all year, only exceeded by one day in late June.
In any case, with the technicals surging today, OBV was already at the top of the window or near it, but the On-Balance Volume jumped. The Money Stream and Balance of Power took off and it was what I would call a very, very significant day technically for this stock.
My projections are that if we get a follow-through this is an 11.0-11.50 type stock, probably good for another 2.5-3.0 points for a trade here.
The one-minute chart shows how the stock gapped up, ran sharply in the morning, pulled back and got quiet at a low volume ebb, moved sideways at a very quiet period, but in the early afternoon it took off again, ran up to over 9.0, backed off, retested, then ran back up and made a nominal high before pulling back late in the session, getting as high as 9.20.
It was a significant day for ADCT, indeed, and we’ll see what kind of movement there will be tomorrow on it. I’m expecting the possibility that this strong of thrust on this heavy of a volume, with a gap across the moving averages, and across the decline at the top line should result in some further price progress.
Let’s keep close tabs on it and see how it goes.
