Charts of the Week, Monday November 13th, 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: NVEC: After the big move it had from June to September the stock then pulled back in an intermediate consolidation, retesting trendlines and moving averages successfully in the first week of October. It ran to new highs in the mid-40s before backing and filling in the last couple weeks in a low-volume flag pattern with underlying technicals holding up very well. This flag pattern indicates a potential thrust to higher prices, perhaps to the top of the trend channel in the mid-to-high 50s, or even as high as the 70 area, which is the all-time high set back in 2004. For now, trading targets are 45, 49 and 54 over the next several weeks. There's a very tight support level at around 38-38
Analysis: TRT: This is very bullish chart pattern, and the stock had a very strong late last week to new all-time highs. The stock is a bit rich here short-term in that it's substantially above its 40-day moving average and may pull back and retest the 12-13 zone, but right now momentum is very strong, and volume and technicals are surging, so we're looking to ride this one at least short-term. The immediate target is around the 19 area, and beyond that the 23-24 zone, and then perhaps even in the high 20s. Short-term support would be any pullback to the breakout point in the 13-13.20 zone. This stock came to light in mid-September after a high-volume breakaway that saw the stock gap up near 8 and run to as high as the 14 area. A four-week consolidation set in, and then the stock last week ran up on heavy volume again to new all-time highs. Support is at 13 and beneath that in the 11 , area, with a stop below 10.
Analysis: ISIS: The stock recently broke out of a 4-year base pattern on heavy volume with a breakaway last Thursday, and followed through with a small gain on Friday. But now that the stock has taken out key overhead resistance around the 9 ,-10 zone it looks like it can make further progress. The year-and-a-half up-channel around the 13 , zone would be my initial trading target, followed by a secondary target up around 17 and longer-term target around 24-25. Short-term support exists on any pullback to the breakout point and/or a gap fill around 9
Analysis: INPC: The stock traded as high as 29 in Dec 2004, but had a dramatic bear-market decline of its own, ending in a high-volume selling climax that saw it reach as low as 5 a share in February of this year. A rally in May brought it back up towards the 9-9 , area, and then another retest occurred near the lows around the 5 , area in July and August before the stock moved back up again. Last week a high-volume breakaway gap took it out of its 1-year base pattern and perhaps initiated a new intermediate trend. Short-term resistance around 12 may be tested shortly and beyond that would be a move up to our trading target around the 17 area, followed by an intermediate target at 22 and longer-term target at 29. Short-term support is around 9.85-10 and beneath that 8 ,-9 with a stop below 8.40.
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