Charts of the Week, Monday October 16th, 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: RMBS: This week we're seeing a wide variety of bullish-looking charts, which often occurs near intermediate highs, but we'll play this momentum market long. However, keep close tabs on the market this week as a turnaround or reversal could occur at any moment. So we'll keep tight stops. The first stock this week is Rambus. The stock saw a more than 4-fold increase from 10 to 47 from Sep 05 to Apr 06. At that point it went into a very sharp intermediate decline, going to all the way back to retest the 10 area in Aug. A sharp move up in Aug and early Sep was followed by a pennant-type pattern on low volume, which resolved last Wed, although Thurs and Fri the stock hesitated, paused, flagged, etc. However, it looks higher. Trading targets are 21, 25 and 30 short-, intermediate- and longer-term, with key support in the 16 ,-17 zone.
Analysis: FTEK: Highlighted several times, we continue to like FTEK, particularly in light of the fact that last week the stock flagged bullishly after breaking out the prior week. We'll continue to follow this one on the long side, and look for a retest of the May highs up near 18.80 shortly. If that's taken out the trading targets are 21, 24 and 29. Short-term support is at around 16
Analysis: VDSI: The longer-term chart exhibits a very distinct parallel up-channel, the bottom of which was tested in June successfully on three different occasions. Subsequent to that the stock edged higher, broke out of a 9-month declining tops line in mid-September and took out key lateral price resistance around 9
Analysis: RNAI: As can be seen from the chart, a 1-year long-term up-channel is in progress. The stock pulled back off the top of that channel in April and retested in both Jul and Aug the 4-4.10 zone successfully and started a new intermediate uptrend, which currently is testing key overhead resistance in the 6
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