Charts of the Week, Monday July 17th, 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: BDCO: This week we feature three lower-priced but active stocks that appear to be emerging from base patterns, one from a recent downtrend. The first is Blue Dolphin Energy. As can be seen from the daily chart, the stock had a huge run in early 2005 followed by a 1-year coiling-type pattern that exploded at the very end of March of this year, resulting in a 4-fold increase in the stock. The stock went into an intermediate pullback decline, retesting support, and moved up recently on increasing volume. A closer look at the 15-minute chart shows that the stock had been basing between May and June, and thrust in early July, and is currently in a 6-7 day tight flag pattern with rising technicals and that looks promising, another reason we're looking at this for a potential bull move despite market conditions. There is some resistance at 7, but beyond that a retest of the highs is possible. We'll set our initial target at 8 ,, followed a top-of-the-channel target around 10 and a longer-term target potentially in 14 range. Short-term support is around the 5-5 1/4 area.
Analysis: FORD: As can be seen from the daily chart, the stock had a monster up move last year. This former favorite of ours and big winner rolled over in the fall and winter of 2005 and went into a 9-month ugly downtrend that saw it drop from nearly 30 down to just over 4.It suddenly sprung to life on heavy volume recently and reached the top of the year-long declining channel before backing off last Thursday and Friday on lower volume but, the overall pattern looks very promising. A closer look at the 15-minute chart shows the thrust on July 6 came on heavy volume, the pullback on lower volume, and then the secondary thrust followed by another low-volume pullback, indicating that a fifth-wave up is likely due and a short-term trade that gets this stock potentially up to the 8 level, my initial trading target is indicated. That level also represents lateral price resistance going back to December. A move through that could get it to my secondary target, which is around 9 ,. A more intermediate to longer term target is at the 11
Analysis: KTCC: As can be seen from the daily chart the stock gapped up on huge volume and surged last week, pulling back mid-week, but then closing strong on Friday on relative heavy volume. The key here is that the stock has broken out of a long coil-type pattern on heavy volume and run to a new 10-year high, which augurs very well for future higher prices. The volume-price thrust is impressive, especially in light of recent current market conditions. This one could be emerging and get to substantially higher prices, provided the market cooperates, of course. If the high is taken out at 7
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