It's tough to bet against the crowd, especially when it looks like a stock's momentum is still intact. Trust me though...TeleCommunication Systems, Inc. (NASDAQ:TSYS), Cellceutix Corp. (OTC:CTIX), and Amarantus Biosciences Inc. (OTC:AMBS) have all dropped subtle hints lately (some of them as lately as today) that suggest their recent bullish runs are over, and now's the time to take profits.
Were it just the 19% gains that TeleCommunication Systems, Inc. had made over the past two week, it might be easier to let it slide. But, when coupling that 19% gain with the big gap from October (from which TSYS is now up 48%), it becomes too much to dismiss. The stock's overbought, and ripe for a pullback.
The biggest/most-frightening clue that TSYS is aching to slide back, however, is a much more subtle one. Notice the volume bars for the past week and a half? Yes, they're all green, meaning the stock's made progress during that time. But, almost each one of those volume bars is weaker than the last, meaning the number of buyers is drying up fast for TeleCommunication Systems. Sooner or later (and likely sooner), the rug's going to almost-instantaneously get pulled out from underneath the rally effort.
It's hard to believe, but Amarantus Biosciences Inc. is up more than 1000% since October. Granted, it probably deserved a bullish move ... even an oversized one like that. It doesn't change the fact, however, that AMBS is technically overbought, and ripe for some profit-taking no matter how worthy it is of a rally.
But why today? After all, the bullish volume still seems to be growing here. That's true - the bullish volume was growing through yesterday. The shape of today's bar from AMBS, however, is firmly implying that today is the proverbial last hurrah. It's a hammer-shaped bar, where the open and close (so far) are at the high for the day, and the tail is relatively long. The idea is that this is the last gasp of bullishness for a while from Amarantus Biosciences.
Finally, Cellceutix Corp. looks like its tank is now nearly empty as well. Although like Amarantus the volume has been rising as CTIX has been rallying, also like AMBS, this chart dropped a big clue today that says there are not many - if any - buyers left after the 135% runup since mid-November.
That clue is also the shape of today's bar, which isn't a hammer, but an outside engulfing reversal. By that, it simply means that the open (and so far the high) from CTIX today was above yesterday's high, and the current price (the "close" so far) is below yesterday's low. In other words, today's open/close range engulfs yesterday's entire trading range, in addition to being pointed in the other direction. After the huge move, it's a red flag that the market's starting to Cellceutix Corp. unwind its opinion and positions on the stock. Yes, it's only a small red flag right now, but all big trends start as small ones, and there's no denying this chart is highly vulnerable.