Breakouts, or Fakeouts? Looks at NCS, SHIP, and PLUG

I know NCI Building Systems, Inc. (NYSE:NCS) looks like a screaming 'buy' today, in the shadow of its 15% pop. And, it may well end up developing into that. Right now though, based on what we can see of NCS, this small cap stock is just displaying the bulls side of its recent volatility. It's a mixed bag at best, overall.

 

What's going well for NCS? To the stock's credit, it has punched through two major falling resistance levels. And, it's found support at two horizontal lines. Today's surge from NCI Building Systems, Inc. is also being made on higher volume. All of these things by themselves and/or in unison bode bullishly for the stock. However....

 

What's not going well for NCI Building Systems? When it's all said and done, this stock is still stuck in a sideways trading range, between $9.20 and $11.50. Today's rally is the forth time NCS has tested the $11.00 area as resistance, and the first three were dismal failures. As compelling as the stock 'feels' right now, we really haven't made any meaningful progress yet. 

 

 

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I have no doubt whatsoever that Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) is borrowing some of its strength today from bigger shipping brothers DryShips Inc. and Navios Maritime. Yet, I'm also confident that SHIP also offers the biggest upside opportunity among all the shippers right now.... especially after today's modest move. 

 

It's only up 2.5% today, but that move from SHIP has also carried the stock above what was starting to develop as resistance at $1.14. Today's high? It's $1.26, and Seanergy Maritime Holdings shares are holding on to that gain pretty well. The buying volume's not been too bad either. 

 

All the other technicals are lining up as well.... and not just today - they've been trending higher for Seanergy Maritime Holdings Corp. Considering this stock (currently at $1.22) was trading at $4.00 in December, I'd take these bullish clues at face value and step into SHIP right now. It's at least got enough juice to close the January gap, but I'm expecting much more.

 

 

While the 3.5% rally from Plug Power Inc. (NASDAQ:PLUG) is solid in the surface, odds are good that most traders are missing the much-bigger picture. This gain from PLUG - not to mention the 14% gain over the past week or so - is likely to be the beginning of a much bigger rally. 

 

It doesn't take long to see what I mean with just a quick look at the chart of PLUG below. The downtrend that extends back to October (and has been guided by a falling resistance line) has been broken. In fact, it was broken three days ago. The bears have had plenty of time to reign in Plug Power Inc. before it got rolling, but either didn't, or couldn't. Either way, the new strength has been put into motion, and underscored with today's high-volume gain.

 

As for a target, I think we need to start with $0.82. That's not only where Plug Power shares hit a ceiling in late December, but it's also where PLUG will find a 38.2% retracement line. Bear in mind that's not an outright exit point for Plug Power Inc.... just a checkpoint to reassess any open long trades.