Sep 10, 2010 8:47 AM PDT
I don't think ARYx Therapeutics, Inc. (NASDAQ:ARYX) is actually ready for prime-time (trading) just yet, but it's getting close. The reason I want to bring it up now rather than after the fact is that after the fact may be too late - this small cap stock could explode with just a hair more technical progress. You need to be ready before then.
Simply put, ARYx Therapeutics shares are caught between a rock and a hard place, but that hard place looks to be just a temporary rest-stop in the midst of a recovery move. The rock is the resistance at the 50-day line (purple), while the hard place for ARYX is the support at the 20-day line (blue). Considering that the stock came from underneath that range last week though, I suspect the underlying trend is a bullish/recovery-based one. One high-volume close above $0.52 should clinch the bigger-picture rally effort.
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If this new-found strength from YRC Worldwide Inc. (NASDAQ:YRCW) is just errant or a brewing fake-out, I'll say this much for it.... it's the best lie I've seen in a while. I doubt that's what's going on here though. I've got a feeling this rebound effort is the real deal, and an omen of what's in store with this small cap for the foreseeable future.
In simplest terms, YRC Worldwide is knocking down all the walls it's supposed to. The 20-day average (blue) fell first three weeks ago, and the 50-day line (purple) was toppled today. If I had to guess (which I do), I'd say YRCW is on its way back up to the main resistance line (orange) currently at $0.45.
What YRC Worldwide shares will do once they get there is anybody's guess, but considering this is one of the better recovery-play stocks - and that it has some room to run before we even encounter that resistance line - it's a speculative play worth owning... in my view.
And finally, some not-so-bullish news on Mattson Technology, Inc. (NASDAQ:MTSN). It looks like the last bastion of hope for this small cap semiconductor name was obliterated today.
It's not just the fact that MTSN fell under the 200-day average line (green) that's turned me into a bear here. It's that, coupled with the fact that this chart also broke under a significant support line at $3.48 (orange). that sealed the deal. In fact, it almost looks a little head-and-shoulder-ish, in retrospect.
The only thing I think might be a problem for the bears with this downtrend is the fact that Mattson Technology left behind a gap today. Even so, going back to close it wouldn't necessarily push the stock back above the 200-day average line, and all those other 'death crosses' from the last month would remain intact. Bottom line? Time to sell.
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