Charts of the Week, Monday September 18th, 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: ENER: An old favorite of ours, ENER obviously had a strong bull market run from the mid-single digits to the 57-plus area by January of this year. After a pullback into mid-Feb the stock then rebounded into the May timeframe but fell short of the Jan high and created a double-top, which led to the strong intermediate decline taking it from around 56 down to retesting the Nov-Dec 05 lows in the 28-29 zone. The stock turned around last week on a breakaway gap on heavy volume, taking it out above short-term resistance, but testing up against multi-month overhead resistance in the 38-39 zone. The stock should be watched for a breakout above that level, because that could trigger a substantial move, with targets at 43, 49 and 55, short-, intermediate-, and long-term. The 21-day moving average has crossed over the 40 DMA, giving a buy signal as well. Short-term support is at the breakaway gap around 35, and beneath that at the moving averages around 33-33 ,.
Analysis: GROW: We highlighted this just a couple weeks ago. The stock broke out of a pennant pattern and through key resistance, as well as taking out the May highs, moving up 13 points on that initial move. A pullback/consolidation/flag-type pattern has been developing over the last 5-6 days. It appears the stock has not finished its move and should break out of this flag to reach towards the top of the long-term up-channel. We'll set targets at 38, 42 and 48. Short-term support exists at the recent pullback low around 29 and the pullback level before that around 25 3/4, with moving average and lateral price support beneath that at 24 1/2. Don't expect that to occur, however, unless we get a sharp break.
Analysis: IIVI: The stock experienced a breakout of a nearly 2-year base pattern and key resistance around 22 last week on heavy volume. The Tues-Wed move extended the July-Aug move up. The stock has now moved from under 17 to 25 , and may be due for a period of resting/flagging/consolidation and perhaps even pullback. 23 , is minor support, 22 much stronger price and moving average support, but the breakout on heavy volume augurs well for longer-term future prices, and we expect a move, with trading targets at 29, 34 and 40 short-, intermediate- and long-term.
Analysis: GIGM: A beautiful long-term base pattern and coiling-type base pattern was broken in January 2006. The stock broke out above the 3 area on heavy volume, consolidated in Jan and Feb and the early part of March before breaking out again in late March. That run ran up into the 10 , area. Another multi-month consolidation ensued, which finally broke out the week before last on heavy volume. Last week the stock edged higher, setting new 6-year highs. It hasn't really broken away from its pattern yet, and I expect it may do so. If it does accelerate, trading targets short-term are 13 ,, 19 and 25. Short-term support is at the 10
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