Charts of the Week, Monday August 7th, 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: NVEC: With the market at a key juncture, not only in terms of its price trend but in terms of the economic interest rate news pending next week, the charts are showing some extremely varied patterns, including some distinct long potentials as well as many short potentials. This week we will highlight six issues, three on the long and three on the short side. The first long is NVE Corp., which had a tremendous run in 2003 and the early part of 2004 that saw it go from the mid-single digits to near 70 about 2 , years ago. But then it experienced a very long decline, culminating in a spike low in the spring of 2005. A one-year base pattern ensued. The stock broke out of that base pattern on strong volume over the last few days with a surge and also took out its declining tops lines. The stock looks potentially substantially higher, and we'll set our trading targets in the 28 area, followed by 35, and then the 40 range or higher long-term. Short-term support is at the 19-20 zone and beneath that the breakout point around the 17 area.
Analysis: MDRX: Allscripts had a strong move from its 2002 low under 2 to a run into the high teens by mid-year 2005. A second half pullback brought it back into the low teens, but this stock did manage to make nominal new highs both in the beginning of March and the beginning of May. In neither case were they able to follow through until last week, when the stock exploded on strong volume before an end of week pullback brought it back. But that explosion put the stock near a six-year high. A key breakout above the 1-year base pattern could lead to much higher prices. Short-term support is around 19 1/2 and then 18. Targets are at 28, 33 and 40.
Analysis: TYL: This NYSE listed company saw its bear-market low in the first quarter of 2001 around 1, and then had a very strong 2-year run that saw it test the 1998 all-time high just underneath the 12 range. A 15-month intermediate pullback took this stock back down to the mid-single digits before a strong intermediate uptrend began in April of last year. Since then the stock has moved in a very distinct rising channel, and last week an important breakout took out the 1998 and 2004 highs, and has set the stock into all-time high territory and could easily continue. Trading targets are 16, 20 and 29 short-, intermediate- and long-term. Short-term support lies near the breakout point around the 11
Analysis: RTI: (SHORT): RTI has broken down technically from a very strong 3-year move which saw it run from the 2003 lows under 9 to the spike highs set this year in May. That was followed by a dramatic high-volume reversal and subsequent 4-wave decline, taking it all the way back down to a retest of near 40 before its recent bounce formed a new bear flag that could set this stock lower. Targets are support around the 40 zone short-term. Intermediate target is around 32, and longer-term in the 25-6 zone. Resistance is up around the 21-day moving average at around 49, with much heavier resistance up in the low-to-mid 50s. The 40-day moving average is around the 56 area, which is 10 points from here, a much longer-term resistance zone.
Analysis: OCR: (SHORT): A very distinct long-term rising channel going all the way back to 2000 is being severely challenged here. The stock moved from its own bear-market low in 1999 around 7 to over 60 earlier this year before a topping formation set in. The stock broke down from that topping formation in May, and rallied back to the neckline or resistance level on low volume and failed to get through it. Last week it recovered from its additional bearish news from the prior week, which tested support successfully, but the overall configuration looks like the potentiality of a major trend break and bears close watching. If that occurs, trading targets are 35, 27 and 18, short-, intermediate and long-term. Resistance and areas for stops would be over the recent rally highs around 49 ,, and the declining tops line around the 50-50 , area.
Analysis: SONO: (SHORT): The stock reached a double-bottom near the 10 level in late 2002 and early 2003. A strong multi-year rising channel was initiated, and the stock moved four-fold reaching to as high as more than 42 in February of this year. But over the last 9 months or so the stock formed a topping pattern which was broken on heavy volume recently, followed by a consolidation that looks like a bear flag. This bear flag is taking place below the bottom of the long-term, 4-year up-channel, and could lead to much further price deterioration. Trading targets are 27 short-term, 22 intermediate-term and around the 18 area longer-term. Resistance is currently at the neckline of the toping pattern around 34, and above that the 36 zone represents the 40-day moving average.
|
