Charts of the Week, Monday October 23rd, 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: ACOR: Despite the market being at lofty levels and way overdue for an important pullback, we'll continue trading the long side until the indices break and take us out via stop. Our first stock, ACOR, had a monstrous high-volume breakaway gap last month and ran hard in just two days from about 2
Analysis: FORD: A former market darling and one of our favorites, FORD had a tremendous run that saw it move more than 10-fold from the fall of 2004 to the end of the summer of 2005 when it peaked out just under 30. It had a 1-year down-channel that saw it move down near the 4 area in June of this year, retested in July and then again in August, and moved in kind of a coiling pattern with strong underlying technicals, indicating accumulation. On Thursday and Friday the stock surged, with Friday's volume being the heaviest in three months and taking it out of the coil pattern and perhaps initiating a new strong surge. If Friday's highs above 6.09 are taken out, I expect the stock to move strongly. There is some resistance around 6.60-.65, but my trading target at this point is in the 7 1/4-1/2 area initially, secondary target around 9, and longer-term target around 11
Analysis: NVEC: We picked this back in August at around the 20 level and watched it run to nearly double just under 40, before a four-week pullback took it back into the high 20s. That, however, has been broken on heavy volume, and last Thursday the stock gapped up and ran hard to retest the September highs on very heavy volume before pulling back Friday on an inside day. A move across the 40-40.15 zone could get this one really rolling. Trading target is around the 49-50 zone, and secondary target in the mid-50s. Longer-term target would be a retest of the 2004 highs in the 65-70 zone, but that's way down the road. Two important support areas are around 34 3/4-35, the recent gap, and beneath that the 40-day moving average around the 30
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