Charts of the Week, Monday April 24th, 2006
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: AVII: This was a previous Chart of the Week and also highlighted as a stock for the second quarter. We're highlighting it again this week because of Friday's action, when the stock popped 10% on more than 3 million shares. It appears to be wanting to come out of the more than 3 month consolidation -- a very bullish-looking consolidation -- in which underlying technicals have held up very well. It looks very similar to what occurred in the Oct-Nov-Dec consolidation period, which led to the strong up-leg and a tripling of the stock in January. My targets are 9, 12 1/2 and 18, short-, intermediate- and longer-term. Currently, the stock is very near key support around 5.90-6.
Analysis: FTEK: The stock had a dramatic move from the December lows around 7 to the high over 18 earlier this month, but the recent pullback has afforded us an opportunity to re-enter. The stock had a high-volume thrust in early February that broke it out of the 4 1/2-month trading range, which initiated the recent uptrend. Currently, the pullback to the trendline and moving averages affords what we believe is a buying opportunity for higher levels. Short-term trading target is obviously a retest of 18, secondary target at 22, and longer-term target in the high 20s. Short-term support around 14.
Analysis: CHDX: We added this one to the model portfolio on the pullback this week from key 2-year resistance, which, as can be seen on the chart, was the June and December highs of 2004. But a very strong, intermediate perhaps long-term uptrend is underway, and we believe that any further pullback, particularly on light volume, which occurred last week, would be an excellent buying opportunity. Strong short-term, price and moving average support is at 9 1/2. A take out of the 11.90-12 zone should lead to a trading target around 14. The secondary intermediate target is up around the 18 area, and the longer-term target would be a retest of the 2004 highs up near 24. As indicated short-term support is 9 1/2 or thereabouts.
Analysis: BITS: The stock came out of a 5 1/2-year downtrend and a 2-year lateral base pattern by an explosive price-volume thrust in early Feb, which initiated the recent uptrend. After an additional consolidation, a secondary price-volume thrust occurred at the end of Feb, confirming the initiation of the new uptrend. A bullish consolidation on low volume took place until last week, when the stock popped up and on three different occasions tested the 9 1/2 area. Technicals and price trend indicate higher levels to come, with short-term target at 11, intermediate target at 14, and longer-term target in the high teens. Short-term support is near the 8-8 1/4 area, and certainly below that something in the 7 1/4-1/2 area should hold any pullbacks. But we're not looking for that. Instead, higher prices should be forthcoming.
Analysis: SWIR: An old favorite of ours, this was originally highlighted in September in that mid-month high-volume price thrust, which broke it out of the base pattern and long-term downtrend. The stock worked its way higher and then went into a 5-month lateral trading range between the 11 and 14 zone, which was taken out on a huge price-volume thrust on 12 1/4 million shares and an opening breakaway gap. However the stock reached the top of the intermediate up-channel at that point. It could be vulnerable to pullbacks, at which point we'd be interested in stepping in, perhaps somewhere near the gap around 16 1/2, should that occur. Trading targets are 22, 30 and 38, short-, intermediate and long-term. Support is at 16 1/2 and beneath that around the 15 zone.
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