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The Chart Whisperer - the Mesh Report

The Chart Whisperer

the Mesh Report Staff March 10, 2011 0

Last week, markets were able to add to recent gains but just slightly. Volume was higher across the board for the indexes but action in individual stocks was less impressive. Increasing oil prices add to pressure at the pump and middle east tensions continue to weigh on markets worldwide. The uptrend is still intact but given thelength of the current rally and the uncertainty abroad, further headway has been more difficult. Weekly chart action has been more volatile and choppy trading has made gains less easy to come by. Given the current environment it would be prudent to protect some of your profits and forgo new positions unless you are more of the active trader. Let volume and price action help lead the way. Now on to some trade ideas.

JNPR Juniper Networks has had a great run but it doesn’t seem to be over just yet. They provide infrastructure products for the telecoms sector. Looking back since July, the weekly chart reveals only accumulation and continued 50 day support. Even given the turmoils of the past few weeks, JNPR has etched a three weeks tight pattern. That’s three weekly closes within 1% of each other, a sign of institutional support. Closing prices for JNPR have been 44.00, 43.90, and 44.11. We even had a shakeout down to 40.46 but again JNPR found support. Given the context of Juniper’s strength this could be one to keep an eye when global tensions subside. Buy point for this pattern is ten cents over the high, in this case, 45.08. That would also mark a new 52 week high.  Average volume is over six million shares.
SOHU SOHU.com is a Chinese web portal. They offer a variety of services including media content, Internet search and games. SOHU recently broke out of what looks like a double bottom on above average volume. Given the markets recent lack of conviction its no wonder SOHU didn’t get too far. The last three weeks have offered a return to the buy area and on much lighter trade. That’s a positive reflection of Institutions holding their shares. Look for support at the 50 day line. A move higher from here, with an increase in trade, would be another sign of institutional support. Average daily volume is just over a million shares.
ACI Arch Coal, as the name reflects, is a Coal producer. Last week, one sector to benefit seems to be the coal industry. ACI broke out of an eight week consolidation only to finish slightly below that mark. Volume was higher the day of the breakout but a bit light for the week. Further increases in trade along with a continuation of Fridays strength would make entry more enticing. Trade has been tight in recent weeks, another positive sign. Fundamentals are strong and Institutional sponsorship has been on the rise. Cash flow is heavy as well. Average daily trade stands at almost 4.5 million shares. With continued strength and better volume this one can be bought here.
PCX Patriot Coal is another coal producer. After suffering a loss for 2010, PCX is expected to earn seventy-seven cents according to analysts. 2012 projections call for more than a 200% increase to over 2.50 per share. That’s some growth spurt. Last weeks close, while not quite the 52 week high, did make a new closing high. Albeit just a penny but further strength would put PCX right in the heart of recent resistance and could be the catalyst to get PCX going. Look for increased trade and follow through from last weeks push. Average volume stands at almost eight million shares.
OPEN, Opentable also shows tight action. That stocks a bit extended but has found continued support at the 50 day line. I word of cation is probably best at this time. Tensions in Libya and global fears of unrest only add to market uncertainty and therefore increase our risk.
Good Luck
The Chart Whisperer



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