As nice as it would be to be able to believe stocks are trading at fair fundamental values right now, they're not. We're just not in that kind of environment. We're in a trading environment, where charts tell you more about a stock's foreseeable future than earnings do. That's what makes iGo, Inc. (NASDAQ:IGOI), Diamond Foods, Inc. (NASDAQ:DMND), and Complete Genomics, Inc. (NASDAQ:GNOM) worth a closer look today, however. All three appear to be gearing up - technically for a big bullish move.
iGo, Inc. shares have been selling off since early 2011. As of the end of June though, the selling effort has waned. As a matter of fact, the gains IGOI has made since the end of June is the bets bullish move (percent-wise) we've seen from the stock since mid-2011. The final straw that needs to be broken is the 100-day moving average line at $0.56. It was tested this week, and though it's not been broken yet, shares remain in the hunt. Anything above the 100-day line is the proverbial green light.
IGOI makes accessories and power management goods (think chargers and adapters). Though sales had been moving in the wrong direction since 2008, the top line seems to have stabilized over the past four quarters. The company's only had slight brushes with profitability, and has actually lost money in all four of its past quarters. Yet, iGo, Inc. is expected to earn $0.02 per share this year, and $0.05 next year, hence the budding buying interest.
After a pretty miserable 2011, Complete Genomics, Inc. finally started to perk up in May after the market started to speculate on a brewing round of genome-mapping acquisitions. Unlike most of its peers though, GNOM has actually continued with that bullish effort. The string of higher lows has become part of a converging wedge, and the stock has since moved above - and found support at - key moving average lines. The upper edge of the wedge and the 200-day moving average line (green) at $2.87 are all that stand between the stock and a serious bullish move.
As was noted, GNOM is one of a few contenders in the gene-sequencing and genome-mapping space. Whether or not it's a buyout target is irrelevant - it's got all the business it needs on its own. The company reports it has a backlog of more than 4000 genomes to process, which would translate into more than $20 million worth of revenue; Complete Genomics needs more machines! With a market cap of $92 million, the math makes sense for investors.
Finally, Diamond Foods, Inc. may have finally worked through all the sellers it needed to. Since the end of July, shares have quietly made their way back above the 100-day moving average line for the first time since September of last year. Though nobody's talking much about it (perhaps BECAUSE nobody's talking much about it), now's the perfect time to wade into a DMND position.
DMND is the snacks and nut company that went from on top of the world in early September of last year to the bottom of the barrel by late September when accusations of an accounting scandal surfaced that, now, appear to be valid. Then again, accounting scandal or not, the company's still got a viable food operation, and a 75% plunge in the value of Diamond Foods shares may have more than priced in the scandal's downside. Unless the company flat-out didn't generate revenue of $965 million as reported fort he past four quarters (and the top line isn't apt to be fudged), then the price/sales ratio of 0.45 still makes this name a worthy speculation. Setting up a base above the 100-day average line and then following through with the slightest of bullish efforts would be all that's needed to unleash the rest of the waiting bulls.