Sep 10, 2010 8:47 AM PDT
Finally. After a couple of rough weeks with UTStarcom, Inc. (NASDAQ:UTSI) after adding it to the public portfolio on May 25th, we're finally starting to see this small cap move with the kind of potential I expected. In fact, we're back in the black today.
The reason I bring UTStarcom up, however, is to reiterate the 'buy' rating on it. We just saw UTSI push off the horizontal support line at $1.65 (orange), and then use the support side of the longer-term trading range (blue) to boost itself again. The final hurdle is the 200-day line (black), but I think that will be topped too. Past that, it should be smoother sailing to the upper edge of the range at $3.00.
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With each passing day, Keryx Biopharmaceuticals (NASDAQ:KERX) slips under another key support level.... moving averages, straight-line support, previous lows.... there simply seems to be no help - the result of a small cap stock that got too far ahead of itself with the strong bullish move in April and early May.
As of right now (today), Keryx Biopharmaceuticals is back under the 10-day average (black), just got pushed lower by a falling resistance line (blue), and fell under the modest support at $4.18. There's just no foothold for the bulls to even get a chance to stop the bleeding. I foresee a revisit to February's lows around $2.20 before it's all said and done.
It stinks, as I know a lot of you were married to this biopharma name. The chart is what it is though.
Speaking of stocks that are in my public portfolio, I think it's time to sell one of 'em.....PetroQuest Energy, Inc. (NYSE:PQ). We're up about 27% from our June 8th entry at $6.65, but like I said then, this small cap stock will be heading into resistance around the mid-$8.00 level. Sure enough, now that we're there, we're starting to see this stock struggle.
The weekly chart of PetroQuest Energy below makes it all pretty clear. We're beyond the upper limit of the trading range between $5.29 and $8.01. And, we're way overextended as of today. That's not to say PQ won't be able to advance past this level.... it just won't be able to do it right now. Let's go ahead and lock in the gain and head to the sidelines, and wait for a better re-entry window. 
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