Charts of the Week, Monday September 4th, 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: GROW: This week we review three of our current portfolio holdings but are not adding anything new, since the market appears to be at a very critical stage, with many technical indicators and charts showing the market at overbought levels and at key resistance. However, a break through here could cause a spurt that could break the market out in a quick, short-term spike, fueled by short covering, into an important top sometime in the next week or two. The first stock is GROW. We first highlighted this on August 14, at around 21.50, and it's up about 5 points since then, with the majority of those gains coming on Friday. The stock broke out of a 2-3 week pennant pattern, gaining 2.83 on nearly 400,000 shares, and reaching up near its May all-time highs. So any further price progression here -- if it breaks out over the 28.10-.15 zone -- could really surge this one and get this moving towards the top of the long-term up-channel, which is up in the low-to-mid 40s. Our short-term target remains in the low 30s ($33), with the intermediate target in the high 30s, and longer-term in mid-40s. Short-term support is at 23 1/2, and beneath that 21.65 or so, with the 40-day moving average and trendline support around 20-21.
Analysis: PWEI: A long-standing favorite of ours since last year, the stock has been rising steadily in a terrific long-term, 2-year up-channel. But the narrower, more muted ascending channel is currently being tested, along with the all-time highs up around the 36.85 area. So we're about a point from there right now. A move above that level could accelerate the price patterns, and I'm still looking for targets short-term at 39 ,-40, intermediate target in the mid-to-high 40s, and longer-term target at 60. Short-term support is at the recent pullback low at around 32 1/2, and beneath that moving average support at about 30 1/2.
Analysis: MDRX: First highlighted on August 7 at around 21.44, the stock is not far from that level. The pattern of the last 4 weeks shows a flag after the high-volume early August breakout of a multi-month base pattern, which successfully retested on two occasions the March-May double-top, which is now support around the 19 ,-3/4 area. That level also represents the approximate zone where the 40-day moving average exists, so there's important short-term support there. A breakout out of the flag pattern could accelerate prices, with targets short-term at 24, intermediate-term 29 and then longer-term 39.
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