Charts of the Week, Monday August 21st, 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: INPH: This week we highlight two examples of potential longs as well as two negative-looking charts that are potential shorts. On the long side, INPH went through a 2-year down-channel that saw it drop from 20 to around 4, bottoming out and basing out over 2005 and the first six months of 2006. The basing-type pattern was broken out in July. The stock pulled back and retested in early August and then exploded last week, particularly on Friday, when volume surged to its highest level in several years, breaking it out of the resistance around the 7 , area. Secondary resistance was met late Friday near 9, and we may see the stock back off and consolidate, but any further price movement from here could result in an upside thrust that takes it up near the 12 level, my initial target. Secondary target is at the 2004 highs up around the 18 area, and longer-term target is in the mid-20s, which would retest the mid-2000 highs. Current short-term support is at Friday's low around the 7.40-.50 area, and beneath that at the 40-day moving average and additional price support around 6.85.
Analysis: NUHC: Another stock featured on the long side, Nu Horizons last Friday thrust out to a new 5 ,-year high, taking out a multiple-year base pattern and looking very promising for further price appreciation. It's recently thrust from the June lows around 7 to over 13 on Friday, pushing 100% in the last 60-day period, and the stock looks like momentum and volume and underlying technicals are indicating higher prices ahead. Current short-term support is in the 11-11 , zone, with price targets up around 18, 22 and 28 short-, intermediate and long-term. Long-term support is down around the 9 , area, with short-term support at 10 3/4
Analysis: UHAL: (SHORT): This real-estate play had a phenomenal run from the 2002 low around 1 to over 100 this year, an increase of more than 100-fold, making it one of Wall Street's biggest winners of the last few years. But a recent sharp price break earlier this month took out a topping-type pattern and support around the 78-79 zone, and the stock, despite a rebound, is acting negatively and the characteristics of the charts may change to down. We'll keep a close eye on this for a potential short, but any low-volume rally back up to the 78-9 zone, or a break below the recent lows around the 65-66 area, would be extreme cause for concern and should lead to lower prices. Trading targets would then be 60, 53 and 42. Resistance is in the 79-81 range, and secondary resistance is in the high 80s to low 90s.
Analysis: GPI: (SHORT): The stock bottomed in October of last year around the 25 area and soared to the low 60s just seven months later. It then moved sideways for about 3 months, broke sharply at the end of July, and has been struggling in a pullback with underlying technicals remaining fairly flat, indicating potentially lower prices and that a trend change may be in progress. Key resistance obviously lies in the 52-53 zone, where 21- and 40-day moving averages as well as lateral price resistance exist. A low-volume rally to that area could be a good place to short it. Certainly a break below 45 1/2, the recent low, could accelerate things. Initial trading target is 39, secondary target 32, and longer-term in the 25-6 zone.
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