Sunday, April 1, 2007

Reader Question: Four Symbols

Here is a recent exchange with one of my readers that I thought you may be interested in. All four of these stocks look like they could set up nice some time in the coming week or so.

Hi John,
Keep up the good work at your blog. I have been a visitor of your blog for a week now and i find it informative. I would like to seek your comments on ONT, CMGI , LMRA and PMCS please ( if you may have time to spare). I would appreciate your feedback.
Thank You. Have a good weekend.

Hi Prasanna,

I took a quick look that those four symbols; here are my quick views on them:
It's in a nice uptrend on both the weekly and daily timeframes; however, there was qite a sell off on Friday on high volume. With a day or two of consolidation this stock could set up for a nice long entry. Based on the monthly chart, there is potentially lots and lots of room for the stock to run; the key will be to watch for a low-risk entry point over the coming week or so.
I've been trading this stock recently, and while it's in a short-term pullback pattern, it (like CMGI) is generally in a bullish uptrend. I will watch for the gap on the morning of 3/28 to get filled and then will watch for an entry on strength above whatever the consolidation level above ~$5.00 is. I like this stock a lot on strength after it closes that gap.
I have traded this one recently as well; like the two above it's also in a nice uptrend. Since it's listed rather than NASDAQ I'm always more skeptical, but it does look like it could setup nice above the 1.62-1.64 level. I would like it a lot of it went another day or two consolidating on the short term chart and then broke that level. Again, lots of room on the monthly chart.
While this one also potentially looks good it's my least favorite of the four. I didn't check the news but it gapped up on Friday so I would be skeptical of any entry until it either consolidates those gains or (better yet) goes and closes that gap first. The weekly chart looks like it's in the process of ending a long downtrend, so I would be more suspect of this stock until both the daily and weekly charts truly turn upward. I would then look for a low risk entry point.

All four of these stocks have very nice volume patters, which is very important in combination with price patterns. I think, in general, you are looking at the right stocks for long entries; the key will be waiting until you find a low-risk entry point on each one.

Good luck!


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