Weekend Update- Chart Patterns CKCM, CEPH, FLML, SNDK
This weekend I am going to go over some of the stocks that are doing poorly.
Click Commerce, Inc (CKCM)
The last hour and half on Friday there was a rumor that they had delayed their 10q. This rumor caused he stock to drop. That evening management came out with a press release stating that nothing had changed. Short interest increases to grow in this stock. We may have a bad entry in it @ $26.00 issued on 1/12/2006, but it does not mean that the chart is technically broken. I think that this could be a buying opportunity at this level, but lets wait until Monday to see how it reacts. It has to gage this weeks action.
When you look at the monthly chart of CKCM you can see the bigger picture of what is going on with this stock. The monthly chart eliminates the noise you see in the daily and shorter time frame charts. As you can see, it declined sharply from it's highs at $225.00 in 2000 and went all the way down to it's lows at 0.93 which it reached in July 2002. It then spent the next year basing at the lows and established a bottom.
It then broke its downtrend line and began to reverse to form a new uptrend line in 2004. With the current pullback it has held its monthly uptrend line. All bets are off with a trend line break of $20.00 which it should hold. The entire pattern overlaps so we know that CKCM is in a correction/rectracement up from the massive correction. Long term price target is at the 50% retracement level around $100.00 in a year. The pullback is worth the wait for the price target.
Cephalon, Inc. (CEPH)
On the weekly chart CEPH is in a six year slim jim pattern. Major support lies in $36.0-$37.00 range and resistance is in the low $80.00 range. It is still trading within it its uptrend channel. CEPH did hit resistance in the $80.00 area. I issued an alert to sell half at resistance. It is still a bit toppy. Once again make sure that you allocate no more than 5% of your portfolio to this or any other position.
Flamel Technologies S.A. (FLML)
I am adding FLML to the update today because it is a high beta momentum stock that I like to trade. I want to see if it holds the $20.00 support at the trendline first. On the weekly chart you can see that FLML is forming a nice bottoming pattern in the shape of a reverse head and shoulders. The Aroon has turned bullish and the PPO is showing signs of bullish divergence. I am putting FLML on the watch list. No position yet. I will send out an alert when entry is triggered.
Apple Computer, Inc. (AAPL)
The daily chart illustrates that AAPL is in a falling wedge pattern. It is still trading within the wedge. Consequently the stock is still in correction mode. Confirmation that this is a falling wedge reversal/continuation pattern is not until a break of the uptrend line @ $65.00ish.
SanDisk Corp. (SNDK)
As you can see on the daily chart, SNDK remains in it's ABC corrective channel. It is holding support above the 200 day moving average which is @ $50.53 The PPO is beginning to look bullish and stochastics are turning upwards.
