Charts of the Week, Monday March 19th, 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: DXPE: One of our old favorites from '05 and '06, DXP Enterprises reached its own bull market peak in May 06 in the 59 range, and then had a sharp setback into July of last year, retesting again in September and October. It moved back up to test resistance in December, but plateauxed for the first quarter until late last week on Friday, when the stock jumped 6
Analysis: JSDA: Jones Soda has been very active of late, but one look at the 1-year chart shows the stock based out most of the summer and fall of last year, broke out in December, pulled back in an orderly flag pattern to retest the breakout point and then moved higher. A retest occurred late Feb/early March, and the stock had a high volume breakaway gap and surged even further, moving from 12 to 20 in a very short period of time. Over the last 3 days the stock consolidated on low volume. Underlying technicals are very strong. This one looks like it has strong momentum and could move dramatically higher, although we'd like to see it pullback and retest the 16 ,-17 support zone. In any case, trading targets are 22, 27, and 33, and as indicated short-term support is around the 16-16 , zone, and beneath that, if it fills the gap, around 15.
Analysis: DSTI: DayStar had a very strong and high percentage move just in the last 60 days or so, after a very long downtrend that saw the stock move off its highs set in mid-2005 around 17 ,. That came after a run from 1 , to 17 ,, culminating in a heavy volume high. A breakdown occurred in about Sept of last year when the stock broke below the 8 area, and then rallied back to it in late Nov, only to fail and drop off very sharply, hitting new 2-year lows around the $2 mark in early Jan before a high-volume explosion set off the new intermediate uptrend. The stock had a sharp upmove last week , reaching the declining tops line, lateral price resistance, and near the top of the current 2 ,-month up-channel. So a pullback/consolidation may be in order, but the stock has terrific underlying technicals. Steady accumulation seems to be going on, and the moving averages have turned higher. So this looks like a good play. Particularly, once it gets out over the 5.70 area,we expect the stock to move into our initial trading target around 7, with secondary target at 10, and longer-term target around 15. Ultra short-term support is at 4.90, but any move down towards the 4 area would test the trendline and rising 21-day moving average.
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