Charts of the Week, Monday November 6th, 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: SIGM: This week we're highlighting issues that appear to have strong potential for growth over the next year or two. However, many of these junior growth stocks have had strong gains this year, particularly in the last several months, and with the market in a vulnerable position, we'd like to see these entered on pullbacks to support. The first is Sigma, a stock we've mentioned several times in the last few years, and really continue to like it now that it's made 18-year highs just recently. As you can see, the chart shows a run from the lows of around 8 in mid-July to a recent high of over 21. I'd like to see the stock pullback and consolidate and perhaps come down into the 16-17 zone on low volume, which would be potentially a good place to accumulate or add to positions. Looking for trading targets of 25, 30 and 35 over the near-, intermediate- and longer-term, perhaps even as high as 40 or better. Short-term support is around the 17-17 , area, and beneath that at the high-volume breakout in October, which came at around the 16 area.
Analysis: CHDX: Chindex is another stock we've been highlighting over the past year and continue to like. As you can see, the longer-term parallel channel is intact, as is the near-term, accelerated 4-month channel. Resistance over the last 4 weeks is around the 14 ,-3/4 area, which if taken out should lead to a move to the top of the short-term and intermediate-term channel up around the 19 area, my initial trading target. Secondary target is up near the 24-25 area, and longer-term target is at 30-plus. Short-term support is around 11 ,-3/4, and beneath that the trendline support around the 10 area.
Analysis: FLML: This drug company recently broke on heavy volume out of a 2-year base pattern, taking out key overhead resistance, and is currently thrusting. The stock has had a strong move from the 17 level to near 28 in just the last several weeks, so we would caution against chasing. But any pullback to the breakout point near the 24-24 , area, particularly on low volume and in a consolidation, would constitute a potential buying zone. Trading targets at 32, 43, and 55 short-, intermediate and long-term. Beneath the recent breakout point at around the 24 area, support is in the 21 , zone.
Analysis: AOB: The stock had a huge percentage run back in 2005 when it exploded off the May '05 bottom near 1. Over the next 6 months it ran to just under 8, obviously a nearly 8-fold increase. Often when that high of a percentage move occurs, we'll get a long intermediate consolidation, and that's what occurred here. A 1-year coil pattern developed. Recently, however, the stock was able to break out of that at the end of September, continuing its upmove through October, It reached a nominal new all-time high just under 8 last week before backing off Thursday and Friday. The overall configuration in the chart pattern and technicals look very good for future price gain. Short-term trading target is 9, intermediate target is 12, and longer-term target around 15 or so. The short-term support is around the 6 ,-7 zone.
Analysis: MFRI: This stock had a very strong move from the beginning of 2003, from the 1.20 area to 11.20 in mid-2005. At that point it went into a 1-year pullback/consolidation. That was followed by another move in the spring of 2006 that took it to nominal new all-time highs, before another multi-month consolidation set in. Recently, the stock broke out on relatively strong volume and then formed a rising flag configuration. Late Friday it broke out again, setting new all-time highs. This one looks higher. It's a thinly traded stock, so caution must be exercised, but the top of the long-term channel in the 23 area is my initial trading target, followed by potentially higher levels in the 30 and 35 area. But this is a powerful looking stock with a low float and a terrific fundamental story as well. Short-term support is around 14-14 ,, and above that minor support exists around 15-15 1/2.
Analysis: CTEC: A long-term base pattern of 4 years has developed with rising bottoms and slightly rising tops. But the recent surge on volume has taken the technicals with it, and the stock has risen to multi-year highs with very promising future price progress ahead of us. Trading targets are 19 , and then a retest of the 2001 all-time highs around the 27 area. Beyond that if that stock is able to break through there, potentially we would see a price in the mid-to-high 30s perhaps. Short-terms support exists around the 13 area with some minor support above that at around 14
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