A handful of stocks are either at the beginning of what appear to be a very big move, or are in the verge of a breakout or breakdown. As such, they may be the better trading opportunities out there right now. Overstock.com Inc. (OSTK), GenVec Inc. (GNVC), Alanco Technologies Inc. (ALAN), and Sigma Designs Inc. (SIGM) are four of the most compelling names; here's a detailed look at each chart.
The
GenVec Inc. (
GNVC) chart can't quite be called a breakout yet, but it's oh-so-close. The long-term resistance line (the same one we mentioned back on September 9th) is being tested today, and the buying volume being today's 9% op - on a Friday no less - says the bulls are serious.
In the meantime, a less-important resistance line has developed for GenVec. It traces the three peaks since late July. Though not quite as meaningful as the other ceiling, it's still a potential tripwire for GNVC.
Either way, GenVec is gearing up for a big move one way or another. Keep an eye out for the wedge's boundaries to break; the volume says it's the upper line that should crack first.
Like, GenVec,
Sigma Designs Inc. (
SIGM) is only on the verge of a major move. Unlike GenVec, Sigma Designs shares are on the verge of a major move lower. Support around $13.80 is on its last leg.
We've looked at a chart of SIGM, for the same reason..... the stock was breaking down some important support levels. This is the first time we've recognized $13.80 as horizontal support, though it's not the first time Sigma Designs has wrestled with it. Today's low of $13.84 is the third time since July it's been tested.
Considering SIGM continues to make lower lows while knocking on the door at a major support line suggests it's only a matter of time before the breakdown takes hold. Be patient.
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It may not be en route to a record-breaking breakdown, but
Overstock.com Inc. (
OSTK) is still heading lower. This range-bound chart is pointed back to the lower edge of a trading zone; OSTK should hit the floor somewhere around the $12.25 area, if history repeats itself.
As far as trading ranges go, Overstock has cultivated a pretty reliable one. The upper edge has been tested three times, and the lower edge has been touched four times.... and all of them were precision-placement peaks and troughs. That's why we're expecting the same this time around.
That said, we know the move from the current price of $14.13 to $12.25 isn't huge potential. It's not bad, but not great either. Fortunately, Overstock.com has a pretty active options market if a little leverage is desired. This is a case where we wouldn't go deep in the money though.
And finally,
Alanco Technologies Inc. (
ALAN) goes in the breakout column. Though off the beaten path, this micro cap name has rocked its way out from under resistance, and survived yesterday's profit-taking efforts.
The ceiling at $0.48 is fairly clear. Though Alanco Technologies shares popped above that line for a while in May and very briefly in August, it's mostly been a trouble spot over the last eight months. Things change for ALAN on Wednesday though. A major move on huge volume carried the stock to a close of $0.57... the best close since May.
On Thursday it was all threatened by a move back to $0.50 (and a pretty strong reversal bar). But, as of today, Alanco is back above that ceiling, and volume is decent. We think this is the beginning of a paradigm shift (for the better) from ALAN.
If you'd like to know of any changes in our opinion of GNVC, ALAN, OSTK, or SIGM (or if we officially recommend them as trades), be
sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.
