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In
This Edition... |
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Sector Outlook:
New Trend Confirmed
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Review of Recent
Chart Analysis
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Newcomer Highlights
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Updated Watchlist
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Healthcare
Trend Confirmed |
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It
was exactly one week ago today we made a bullish
call on healthcare, and pinpointed a handful of specific healthcare
industries we felt were likely to lead that rally. Of course, the opinion
was focused on the small caps within those respective healthcare industries.
 We
just hope you were listening.
Why? Healthcare
is the only winning sector this week, up about 2.2%. That's not a huge
victory, but it sure beats the overall market's 3.5% loss for the week
so far. If the trends we think are in place truly are in
place (and the disparity widens), the sector-based call will grow in importance.
Though our bullish
bias for healthcare equipment, technology, and suppliers still stands -
and
has paid off - it's also worth nothing there really haven't been any
bad healthcare industries to be in since this time last week.
Just to offer
a bit of a roadmap regarding where things seem to be headed, we've added
a percentage-change chart comparing all the major sectors to one
another. This visualization adds some perspective that simply can't
be
gleaned from numbers themselves.
As you can see,
healthcare stocks have lagged - badly - since the March bottom.
However, that's the whole point of a sector rotation strategy...
to
find tomorrow's leaders, which are frequency yesterday's losers (proverbially
speaking). In just the past week healthcare stocks have clearly picked
up their pace, which may well be the beginning of the next major rotation.
Anyway, we just
wanted to remind you of a potential emerging sector trend and all the industry
sub-trends we pointed out last week.
A lot's happened
with our focus stocks since last week's update. Check it out.
 Neogenomics
Inc. (NGNM)
Last week, we
pointed out that Neogenomics tumble under support at $1.30 was likely to
be irreparable damage. With the stock currently at $1.22 and pointed lower,
it's an even easier argument to make. The fact that the bulls tried to
reverse the bearish course on Wednesday (with a high volume push from $1.20
to $1.29) yet ultimately failed to do so is apt to further encourage more
profit taking.
As we said at
that time, there seems to be a floor at 92 cents, and then again around
62 cents if the chart really starts to deteriorate.
 Petaquilla
Minerals (PTQMF)
A couple of
days after we highlighted rising shares of Petaquilla Minerals (PTQMF),
the peak of 72.9 cents was made, and shares hit 53.8 cents four days later.
Not to worry too much though... they're at 62.8 cents right now, and appear
to be resuming their uptrend.
Actually, the
pullback was hardly a surprise; we specifically mentioned Petaquilla looked
very overbought in the short run, and suggested waiting for a pullback
if you wanted in.
Just so you
know, the dip to 53.8 cents was a Goldilocks dip....not too hard, not too
soft - just enough to shake out the weak hands and open the door for another
round of new buyers.
 Mirani
Brands Inc. (MRIB)
Yep. Mirani
Brands shares did indeed go from bad to worse; hopefully you profited from
the downtrend.
Our journey
actually started back when support at 25 cents broke down, and shares made
their way to a low of 17 cents. At that point, the breakdown gain was weighing
in at 29%. However, we mentioned last week that MRIB seemed to have some
more downside to go.
Sure enough,
shares are currently at 15 cents, making the move from 24 cents (a likely
short entry) a 37% victory. The stock's still pressing lower too, but at
this point, we'd recommend not pressing your luck - think about making
an exit here if you were in a short position.
Other Recent
Discussions
The saga of
ParkerVision
Inc. (PRKR) continues. We saw a threat of a breakout last week, but
the bulls never took it anywhere. The stock's still in a position to make
a run, but for now seems content to simply consolidate between $3.00 and
$3.55. We'll keep any eye on it, but this one's getting dusty.
Herzfeld
Caribbean Basin Fund Inc. (CUBA) did indeed fall back last week, finally
catching some support around $6.00. That's not a total surprise, given
the nature of the vehicle itself as well as a less-than-helpful market
environment. We'll keep following it for a while though... we still love
the concept.
Flow International
Corp. (FLOW) managed to crawl back onto our watchlist this week, though
that's not to say it's back in our good graces. We specifically mentioned
it would need to break above resistance at $2.80 for us to do any more
than casually watch it, and it has yet to do that. On the other hand, it
seems to be gearing up for another try today after the trip back to $2.25.
Despite the
pullback we saw from International Coal Group Inc. (ICO) this week
after last Friday's mention, we still like the coal group as well as this
particular equity. The chart's getting some much needed relief today. The
selloff was on dwindling volume too, so we don't see any major headwinds
looming the next time we revisit last week's high of $3.70.
We're interested
in all the new companies we added to our watchlist today, but this handful
really caught our eye.
 Aristotle
Corp. (ARTL)
Aristotle Corp.
has been on our watchlist longer than almost any other stock we're still
tracking (and has been on the list almost since its inception). Yet, we've
never taken a close look at it. It's an interesting chart though, so we'll
correct our omission today.
There are two
key lines to note on our ARTL chart - the rising support line, and the
rising resistance line. The recent uptrend has been framed very consistently
between the two edges of that zone. You'll also notice, however, that those
two lines are diverging.
That divergence
means - assuming the range trading remains intact - that Aristotle
shares are apt to become more volatile as time moves along, since support
and resistance are getting further and further apart. That's not a bad
thing or a good thing... just a trading reality. In the meantime, buying
at the low end of the range and selling at the high end hasn't been a bad
little scalp trade.
 VCG
Holding Corp. (VCGH)
We tend to talk
about them quite a bit, since they're a pretty good trading set up. However,
we don't actually often get a chance to show a wedge (or a triangle)
in the making. As it just so happens, we can explain what a wedge is with
a real-life example from our watchlist, in addition to showing you
what may make the stock trade-worthy
It's actually
pretty simple... VCGH's ceiling is falling, and the floor is rising. How
do we know those two lines (see the chart) are the ceiling and floor, also
known as resistance and support? Well, it's not always an exact science,
but we can effectively trace the major highs and lows over the last few
weeks into relatively straight lines. (Like we said, it's not perfect ...nothing
ever is though.)
Obviously the
stock can't remain contained in a shape that's sooner or later going to
shrink to nothing, so VCGH is likely to be forced out of one of these boundaries
in the near future. Which one? Great question - that's what we're
waiting for. Once it happens though, trading in the same direction
is the higher-odds trade.
 BRT
Realty Trust (BRT)
Though volatility
can be very beneficial to some traders, sometimes it's like playing with
fire ... you can get burned if you do it wrong.
That's not to
say we don't suggest volatile stocks ourselves, because we do. Given the
choice though, if we can achieve the same kinds of results with an involatile
stock as we can with a volatile stock, the choice is a no-brainer - we
go for the low beta ticker. Why? Because the lower the volatility,
the more reliable and consistent chart patterns become, making them easier
to 'read'.
The reason we
bring it up now is to explain why we found BRT Realty so compelling
this week. It's been very well tempered of late.
Oh, that
hasn't always been the case; this thing was rocking and rolling
just a few weeks ago. After a major setback in April, however, trading
has been very even, the uptrend has been slow to develop, but most importantly,
that
uptrend has become very evident... even if a little slow (the pace
is picking up though).
These U-shaped
charts are one of our favorite patterns to work with when searching for
a stock with lots of upside, as they have a high success rate. V-shaped
reversals are a bit of a coin toss. Low-volatility 'U' shapes like
this one are even easier to jump on.
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This
Week's Watchlist |
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As we've done
quite a bit lately, several tickers were dropped from the watchlist, a
couple of them are close to being dropped, and several new names were added.
Just FYI, the
idea stream of trade-worthy stocks - as you can tell below - is really
stating to flow now. This summer doesn't have to be a lazy, boring summer
for investors. Stay tuned.
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U.S. Gold Corp.
(UXG) - the wedge breakout's first attempt failed, attempt #2 beginning
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Gabelli Healthcare
& Wellness (GRX) - starting to stagnate around resistance at $5.15
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G-Willi Food Intl.
(WILC) - broke down this week, let's take it off the watchlist
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Flow International
Corp. (FLOW) - a reversal of last week's pullback is in the works
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Aristotle Corp.
(ARTL) - still quietly pushing higher in a rising trading range
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Herzfeld Caribbean
Basin Fund Inc. (CUBA) - stalled after the breakout
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JAG Media Holdings
Inc. (JAGH) - not so much breaking down... more like deteriorating
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Far East Energy
Corp. (FEEC) - remains volatile, but still in an uptrend
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Solar Power Inc.
(SOPW) - pulled back from the high at $1.16 (a good thing), starting to
recover
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Neogemomics Inc,
(NGNM) - support at $1.30 was broken, see notes above
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Oncothyreon Inc.
(ONTY) - support at $2.54 was broken, the breakdown potential is raised
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Affymetrix Inc,
(AFFX) - last week's overbought condition was relieved, uptrend resumes
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New Energy Technologies
Inc. (NENE) - a true breakout, though a little overbought right now
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PolyMedix Inc.
(PYMX) - support at $0.63 ended up breaking, hit $0.61 today
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Petaquilla Minerals
(PTQMF) - see our notes above
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China Pharma Holdings
(CPHI) - still consolidating between $1.40 and $1.50
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VCG Holding Corp.
(VCGH) - remains in consolidation mode, the wedge is tightening
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Fieldpoint Petroleum
Corp. (FPP) - still headed sideways... may not be worth following
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International Coal
Group Inc. (ICO) - see our notes above
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Blue Earth Solutions,
Inc. (BESN) - was trashed until this week, then started to perk up on high
volume
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International Stem
Cell Corporation (ISCO) - major breakdown threat (& already in motion)
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Echo Therapeutics,
Inc. (ECTE) - another breakdown threat following a huge run up
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Spark Networks,
Inc. (LOV) - an interesting high-volume recovery effort
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ICO Inc. (ICOC)
- the recent pullback is augmented by today's high volume
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The Dixie Group,
Inc. (DXYN) - just check out a chart, the rebound effort is building momentum
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BRT Realty Trust
(BRT) - this chart looks like DXYN's, except with growing volume
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Mueller Water Products,
Inc. (MWA) - pullback seems benign so far, but is part of a long-term downtrend
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AtriCure, Inc.
(ATRC) - moving higher, but only in erratic leaps
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Reading International
Inc. (RDI) - beautiful high volume recovery rally, even if overbought right
now
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Updated: 11:13 am PST (19:13 GMT), March 8, 2010
