The stock market had a lousy day on Tuesday. We’re going to cover both longs and shorts, but mostly shorts. This is a weak market, but we’re in a zone where we expect to see some sort of better snapback move. The overall trend is down, and if we do break in these zones, we could come down hard and fast in a big climax low. So, either they rally from here or they’re going to plunge and come down quite quickly with a very big oversold reading and a negative tick that could result in a rally for several days.
Acacia Research Corporation (ACTG) continues to drop after multiple highs last year and this year. It dropped, came down, got crushed in July, dropping from 40 down to 23-24 range. It created a rising wedge, which failed at resistance, rolled over to new lows, and then formed a bear wedge. In the last week and a half, it’s been broken, and is right on key support. This goes back quite a ways. The charts shows the Feb-March, 2011, lows, and the low earlier this year, are in this same range. If it cracks here, you could see a precipice fall that takes this stock down into the 16-17 range. It has had a 4-wave move down and could make a 5th wave down.
VeriFone Systems, Inc (PAY), after rolling over hard this year, formed a wedge, a second wedge, a mini wedge, then a larger wedge, and it’s still in a downtrend. It appears that if it does break, it will retest the low at 27, and then fall into the mid 20’s.
Textainer Group Holdings Limited (TGH) has a massive top formation, key support is being tested, a falling little wedge to support is broken, which could trigger a nasty decline into the mid 20’s.
Titan Machinery, Inc. (TITN) topped out, broke down, snapped back, formed a big-bear wedge in the last few months, and if it breaks down, look for a move at 16-16 1/2, 17 at the very least.
Other stocks on Harry’s Charts of the Day are Celsion Corp. (CLSN), Diamond Foods, Inc. (DMND), The Home Depot, Inc. (HD), Repros Therapeutics Inc. (RPRX), TearLab Corporation (TEAR), United States Natural Gas (UNG).
Stocks on the short side include athenahealth, Inc. (ATHN), Buffalo Wild Wings Inc. (BWLD), Con-way Inc. (CNW), Deckers Outdoor Corp. (DECK), Dollar General Corporation (DG), Innophos Holdings Inc (IPHS), Raven Industries Inc. (RAVN), and Titan Machinery, Inc. (TITN).