Charts of the Week, Monday June 12th, 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: TZOO: Travelzoo had a huge, phenomenal breakaway gap in mid-April on a terrific earnings report, and then ran hard, more than doubling after the gap. Since then the stock has been in a 6-week low volume rectracement, with underlying technicals holding up well. The stock has reached all the way back to the point at which it technically broke out, above the Sept and Dec highs and right at the breakaway up-gap in Aril. This should be monitored closely for a breakout of the declining channel on a surge in volume which could trigger a move. Trading targets are 30, 34, and 38. A tight stop may be used a point below current prices at around the 26 1/2 area.
Analysis: CHNR: This stock had a monstrous upmove in Jan, when it moved from under 4 to nearly 22 in just a little more than a week. Since then the stock has been in a slow, declining intermediate down-channel, with volume dwindling to a very low ebb until Friday when the stock exploded on heavy volume on Nasdaq's approval of its continual listing. That may be a trigger for a strong move, but we've seen this stock have one or two day pops and then settle down. A follow-through is going to be key here, and we'll be watching for one carefully. The move on Fri came on the heaviest volume in three months, and also took it out back above the current up-channel and across the 40-day moving average, a very positive sign. Traders who do enter may want to keep a stop below the 6 3/4 -7 zone, where the move began and where long-term support lies. Resistance and potential trading targets would be 12 1/2, 16 and 19.
Analysis: SIMC: This stock had a tremendous, high-volume breakaway move in May, pulled back in late May on low volume and exploded. It's currently in another consolidation pattern, and if a breakout does occur over the 11 3/4-12 zone, this stock will probably take out its high at 12.87, and have a fifth and final wave up which should take it to the mid-to-high teens. Stops may be used on any move that takes it below the 9 1/2 support area.
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