Charts of the Week, Monday January 8th, 2007
Charts of the Week are stocks that appear to be attractive candidates for short- to intermediate-term (2-6 weeks) returns based on analysis of their daily or weekly chart formations and underlying technicals. Support levels may be used as possible stops.
Analysis: VDSI: A current portfolio holding of ours and probably one of our longest holdings, since mid-October, the stock has consolidated beneath multi-year highs for the Nov-Dec period, but broke out last week on heavy volume to new six-year highs and appears to be about to test its 2000 all-time highs just over 16. The consolidation is complete and beyond 16 my trading targets are 22 and then the 29-30 zone longer-term. Short-term support would be near the breakout point back around 12
Analysis: ISPH: Added to our portfolio last week, the stock exhibited a beautiful one-year base pattern, broke out on heavy volume in December, and then double-flagged before breaking out again last week to new 52-week highs. Initial target 7.90, and secondary target at 9
Analysis: NEXC: As can be seen from the chart, a high-volume price thrust occurred in March 2006 initiating the current strong long-term uptrend that's in place. Secondary breakout occurred in June on just as heavy volume before a late summer/early fall consolidation took place. A late October breakout continued the uptrend, which was followed by a six-week consolidation from mid-Nov to late Dec, but last week the stock broke out again on heavy volume and went to new five-year highs, and now appears to be headed for a test of the 10-10 , area, our initial trading target. Secondary target at 14-15, and longer-term target in the 19-20 range. Short-term support exists at the recent breakout point around 7 ,, and beneath that the December lows around 6
Analysis: LVLT: As can be seen from the long-term chart, the stock broke out of a head-and-shoulders bottom pattern in the fall 2005, which initiated a strong long-term uptrend. The move from the low in May 2005 to the high in May 2006 took the stock from about 1 , up to 6, about a four-fold increase, which resulted in a rather sharp intermediate pullback, taking the stock down to test the long-term uptrend line last August. It held that uptrend line, moved back up to retest the 6 area, but backed off and consolidated in Nov-Dec. Three different tests of the 6-6.10 zone have failed, but the stock continues to make noise like it wants to break out. Last week the stock thrust again and is approaching that 6-6.10 level. We'll be keeping a close on this for a breakout above that area, which if it occurs should lead to our near-term trading target at 7
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