Charts of the Week, Monday May 1st, 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: AAPL: As many of you know Apple's been in a long-term bull market since its bottom in 2003 just under 7. The stock has proceeded to move up steadily over the last three years and reached a high near 87 in January before pulling back in an intermediate consolidation downtrend that saw it drop nearly 30 points before bottoming out in late March just under 58. The stock then had a sharp move up and broke out on heavy volume, pulled back and retested and has been consolidating over the last few weeks, appearing to have formed a potential head-and-shoulders base-type pattern, with the neckline up around the 72-3 zone. Traders may want to play the May or June 70 call options on this. The May 70s are QAAEN, trading around 2.60, and the June 70s (QAAFN), to give you a little bit more time, are trading around 4. But technically this stock has resistance in the 72-3 zone, and a breakout above that could trigger a move to my initial trading target up around 79, secondary target a retest of the 86-7 all-time highs, and then beyond that top of the long-term channel measure up near 100-105. Short-term support is in 64-65 zone and beneath that uptrend line around 60.
Analysis: STKL: SunOpta has been in a beautiful intermediate rising channel since the Oct-Nov lows under 5. The stock has more than doubled in that period of time in a steady uptrend, and over the last couple weeks has moved sharply from the 8 area to 10 3/4 before backing off last week. The overall pattern looks like it can continue. One note of caution -- the 2003 and 2004 highs up around the 11 1/4-11.45 area are not far above, so that overhead resistance may provide enough resistance to cause the stock to pullback and do a retest. We are not entering this one immediately in order to see how it acts in this zone. Any pullback to the 9-9 1/4 area may be an opportunity to initiate positions, or a breakout over 10 3/4 with heavy volume.
Analysis: JOBS: After forming a base for more than a year, the stock broke out early this month, and then flagged beautifully before last week's mid-week breakout took it to new 52- week highs. The stock looks like a new trend has been initiated, and calling for a move up to test the 29-30 zone, our initial trading target. Secondary target is in the mid-30s and longer-term target near 42. Secondary support exists around the 21 zone, and beneath that the prior breakout point around the 19-19 1/4 zone.
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