Charts of the Week, Monday August 14th, 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: FTEK: A former pick of ours back in Feb, the stock ran at that point from about 8 to nearly 19, more than doubling in the beginning of this year, but an intermediate pullback starting in May, when most stocks started their pullback, took the stock all the way back to retest the key long-term support level at 10, which is lateral, price and long-term rising trendline support. The stock has since moved up about 40% from 10 to around 14, taking it back up through its declining tops line and 21- and 40-day moving averages, which are now curling up and about to cross over. Any low-volume pullback from this level to perhaps the 11 ,-12 zone would be an ideal entry point. 14 represents resistance, and a breakout above that could accelerate momentum. The technicals are improving as well, a sign the stock may be interesting in here. Trading targets are 15 ,, 18
Analysis: DXPE: DXP Enterprises, which has been a favorite of ours going back about a year, had a strong move from the beginning of this year at around 17 to as high as 59, more than tripling in just three months; That resulted in an intermediate pullback that saw the stock come all the way back down to retest the low 20s, near long-term support. However, it did take out the long-term trendlines and has since rallied sharply on a surge in volume, breaking out above its declining tops lines and moving averages and up to secondary resistance in the high 30s before pulling back gently on low volume. The current pullback is at or near the 21- and 40-day moving average support as well as lateral price support. The downside here appears to be limited, but any further deterioration into the high 20s could represent an interesting opportunity. A breakout over 38 ,-39 could propel the stock into a sharp up-move. Trading targets are 38, 45 and then 55.
Analysis: GROW: As can be seen from this chart, a beautiful long-term rising channel is in progress, and the stock just last week came out of a very well defined consolidation range near the long-term trendline at the bottom of the channel. The pullback from the 28 level to the 18 level, a 10-point move from the May high to July low, came on low volume with the technicals holding up fairly well. Friday's high-volume burst-out could be the beginning of a new leg-up. Trading targets would be 24 ,, 28 and 35, with short-term support at around 19 and beneath that the pullback low at 17 ,.
Analysis: KTCC: We're revisiting this stock, which we highlighted a month ago. At that time the stock had exploded on heavy volume and had a large breakaway gap, so I anticipated a consolidation mode. As you can see, since then the stock has consolidated nicely in a rising configuration, with strong volume on up days and low volume on down days, indicating bullish action and higher prices ahead. A double-top at 7.60 or so needs to be taken out for the stock to really accelerate. If that occurs, a move to my initial target at 9 , may take place. Secondary target is 12, and longer-term target 16, with short-term support around the 6 level and beneath that the gap around the 5.55-.75 area.
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