Charts of the Week, Monday July 3rd, 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: VRTX: This week we highlight half a dozen stocks that have had excellent recent relative strength, and appear to have strong potential in the next upleg in the market. Since the indices are close to breaking out into a strong summer rally, which still has to be resolved, these stocks all may benefit from any strong rally. The first one is Vertex. A former favorite of ours, Vertex had a big run from the breakout in May 05, at which point it ran from the low single digits to the mid-40s. It then went into an intermediate consolidation downtrend, which took it back down into the upper 20s, but the stock last week broke out on very big news and appears to be on the verge of initiating a new intermediate uptrend. Trading targets are 40, 45 and 52, and short-term support is near the 34 zone, and then 32.
Analysis: SMDI: As can be seen from the chart, the stock initiated a new intermediate uptrend on a high-volume breakout in Nov last year in the 3s. The stock then moved steadily to about 13 , by early May. Since then the stock has been consolidating and holding support and last Friday surged to new 5-year highs, and appears to be ready to take on the 2001 highs up in the 16 zone, our initial trading target. Beyond that the longer-term targets are 22 and 28, with short-term support in the 10-10 , zone.
Analysis: SMSI: SMSI: A favorite of ours last year and first highlighted last Sept in the 6 area, the stock moved steadily from the Dec lows to the recent new multi-year highs up near 16 , and appears to be heading higher in a strong uptrend with volume and technicals surging . The short-term trading target would be 20, intermediate target 25, and longer-term target in the 29-30 zone. Short-tem support around 13.85 and beneath that around the 12 1/2. area. SMSI is in a strong uptrend and accelerating and looks higher. The top of the long-term uptrend in the high 20s, as indicated, is our longer-term target.
Analysis: OMNI: As seen in this chart, this stock has been in a beautiful uptrend since the spring of '05 in the low single digits. The stock has thrust and surged recently from the March low around 3 to over 12 at Friday's close, which closed at a new 6-year high. Although the stock appears to be possibly ahead of itself, momentum is very strong and the stock could easily move to higher levels. Short-term trading target at around 15, intermediate target 18 and longer-term target in the mid-20s. Short-term support and possible buy on any low volume channel pullback would be down in the 10 ,-11 zone. Beneath that the 21-day moving average around 9 1/2.
Analysis: SIMC: This is a stock we've highlighted a couple times in the last month or so, which appears to be an extremely strong technical pattern with underling technicals surging. As can be seen from the chart, after basing for nearly 2 years, the stock exploded in May on heavy volume, pulled back and had a secondary explosion, consolidated very bullishly with volume moving to a low ebb mid-week last week, before late Friday's burst took it back up near its June highs and highs for the year. Any follow-through here could explode the stock. Trading targets would in the 17, 20 and 24 zones short-, intermediate-, and longer-term. Short-term support around the 10 zone, and beneath that around 8
Analysis: MIKR: We've recently highlighted this one as well. The stock formed a beautiful 15-month base pattern, exploded on high volume early in June, has run strongly with a couple pullbacks, but closed near its high for the year and appears to have strong momentum. I like this stock for higher levels, . Short-term support around the 11
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