Charts of the Week, Monday July 31st, 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: CHDX: The stock was highlighted as a pick earlier this year and had a nice run, doubling from about 6 , in mid March to near 13 by later April. As can be seen from the chart, the stock had a strong bull market rebound in 2003, moving from under 2 to as high as 24. Then a two-year decline brought it back down into the low single digits, which was followed by a thrust last November that broke this out of its downtrend, and set off the longer-term uptrend that is currently in place. After reaching as high as just under 13 In April from about 3 last October, the stock pulled back in a two-month intermediate decline, retesting the 6 ,-7 support zone and bounced recently. The long-term channel remains intact but I'd like to see better volume. Resistance at about 10 needs to be taken out for this one to really get going. Targets would be 10, 12 , and then 17 area. Short-term support appears to be around the 8

Analysis: DXPE: This is an old favorite of ours. As can be seen on the chart, the stock experienced a large high-volume breakaway gap in July 2005 that triggered the long-term move. That began in the mid-single digits, and eventually in May of this year reached as high as more than 59. As a result of that nearly ten fold move profit-taking set in and an intermediate decline ensued, which saw the stock pull back from that 59 level to under 22 recently. But the stock has snapped back with vengeance. Early last week the stock gapped up on big volume and ran hard. Since then it's been in a flagging pattern near its declining tops line and 40-day moving average. This is one to be watched. A breakout above the 34 zone or so could extend what looks like the beginning of another strong intermediate- to longer-term move. My targets on this are 37, 42 and 50 short-, intermediate- and longer-term, and perhaps even higher. Short-term support would be at the 21-day moving average, and at the gap around the 27 1/2-28 zone.

Analysis: KTCC: This thinly traded stock has an outstanding technical pattern and recently neared a 10-year high. The pattern shows a high-volume breakaway gap earlier this month followed by a bullish consolidation. It appears this stock has initiated an extension of its long-term uptrend and a new intermediate uptrend. The stock did make an attempt to breakout, but failed to follow through about a week and a half ago, reaching as high as 7.60. That level is short-term resistance. Provided it's taken out on any kind of volume surge, the stock has a target in the 9 area, followed by an intermediate target around 12 and longer-term target in the 17-18 zone. Short-term support is near the breakaway gap and 21-day moving average, which comes in around the 5.35-.50 zone. Beneath that, the 40-day moving average is about 4.70-.75.

Analysis: LBIX: The stock really got going in March when it broke out above the 2004-05 highs around the 2 level with a big burst in volume. The stock then pulled back and flagged, but broke out again, and has been moving up with higher highs and higher lows. The move that took place from the middle of June to the beginning of July thrust this stock to a new all-time high area, and it then consolidated in a bullish flag formation before breaking out last Thurs and Friday. A beautiful intermediate- to long-term move is underway, and I expect this should continue, with trading targets in the 8 ,, 11 and 15 zone, short-, intermediate and long-term. Short-term support is around the 5.25-.35 zone.

Analysis: OMNI: A current portfolio holding, the stock has been in a strong uptrend since its Jan 2005 lows just over 1, having reached recently as high as 12 ,. Backing off in a bullish flag, the stock recently surged back up and moved out. It appears the current strong intermediate uptrend remains intact, and if the stock can make further progress, trading targets once 12.60 is taken out would be in the 15 area, followed by 18 , and then 25 short-, intermediate and long-term. Chart support remains at the recent pullback lows around 9.40, with the 40-day moving average around the 9.90 area.

Analysis: PWEI: PW Eagle continues in a beautiful long-term uptrend, although the move since the December peak has been much more of a muted rising consolidation-range, longer term flag-type formation. Underlying technicals have held up very well, particularly in light of the market pullback, and this appears to be a relative strength leader. A move above obvious resistance at 32 could send the stock soaring again. That remains our short-term resistance and target. A move above that should get us to our secondary target in the high 30s, followed by longer-term target in mid-to-high 40s or higher. Short-term support at the recent pullback at around 24. A violation of that level would be cause for extreme concern, particularly if volume increases, but we deem that unlikely, and are looking for strong price progress in the second half of 2006.

Analysis: STEC: Simple Technology, as can be seen on the chart, had a 2 , year coiling base pattern. In the last 8-9 months or so that pattern morphed into a head-and-shoulders type bottom, with the neckline broken on a strong breakaway gap on heavy volume a couple weeks ago. A breakout of the coil followed. The stock is currently testing the spring and fall 2004 resistance level. The stock may be short-term a bit ahead of itself, and we'd look for a pullback to support around the 4

Analysis: VRTX: This has been one of our favorite stocks and favorite patterns of the last couple years. The stock initiated a new strong bull-market thrust in May 2005 with a breakaway gap on heavy volume. That occurred in the low teens. That was followed by a 10-month run into the mid-40s. The stock then pulled back in March, and went into an intermediate downtrend, which saw it ultimately triple bottom around the 29 area. VRTX broke out on a heavy breakaway gap on volume in June, but the stock has basically had a difficult time following through -- although I believe that will occur. The last 4-weeks consolidation range looks bullish, and I believe the stock, once it moves up above 37-37

Analysis: ZVXI: The stock has been a favorite of ours for the last several months, and continues in a beautiful bull-market uptrend, which was initiated by a strong breakaway high-volume thrust in November in the mid-to-high single digits. Since then the stock has reached near 20, but pulled back to consolidate . This thinly traded stock has only about 5 , million shares floating and averages a couple hundred thousand shares a day, but certainly has extremely strong further potential, and we'd be looking for higher prices with targets at 19 ,, 25 and 30. Short-term support at around the 13 ,-14 zone, with the long-term rising trendline around 12 ,.