Aug 27, 2010 10:04 AM PDT
A bit of bad news for anybody who owns shares of Mirant Corporation (NYSE:MIR) ... your position's probably headed lower.
As the daily chart shows, MIR has fallen under a fairly important support line, and today confirmed that breakdown with a major bearish out side day. Though the selling volume isn't all that strong yet, we suspect by the end of the day that volume for Mirant Corporation will be higher, and decidedly bearish.
What you can see on a weekly chart (not shown) of Mirant Corporation is a bearish MACD crossunder - a bigger picture problem that took a few weeks to materialize, but could also play out over the span of a few weeks. There's some support around $14.10 for MIR, but if that floor breaks as well, the next stop could be sub-$10.00.
Just to be clear, we think Deep Down, Inc. (OTC:DPDW) is overbought in the short run, and as such we don't advocate stepping into it today. In the long run though, this setup has outstanding upside potential.
We've opted to show you a weekly chart of Deep Down shares, though we also encourage you to examine a daily chart on your own, as there's more detail. What you're going to see either way, however, is how DPDW is on the verge of knocking out a resistance line at $0.175, and then - hopefully - making an attack on the one at $0.194.
Though volume has been pretty solid on the recent upswing from Deep Down Inc., like we said, the overbought condition would ideally be burned off by a small pullback before DPDW before the breakout attempt is made.
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Just when it looked like maritime shipping might start a recovery, OceanFreight Inc. (NASDAQ:OCNF) falls apart.
The sell/short signal for OceanFreight here is a simple one - the support line at $1.20 snapped yesterday following a string of lower highs since May. Though OCNF shares are up a little today, the damage has already been done.
The compelling part about the demise of OceanFreight shares, however, isn't the breakdown by itself. No, check out the volume bars.... consistently read (bearish), and they've been on the rise from OCNF since September. In other words, the sellers are gaining momentum as well as numbers.
The best shot Rexahn Pharmaceuticals, Inc. (AMEX:RNN) had at pulling itself up by its bootstraps came yesterday. The fat that it completely and miserably failed to do so strongly suggests this chart will struggle to head anywhere but lower. The kiss of death was the height of yesterday's bar. RNN jumped up at the open, from $0.78 to $0.99. And what happened after that? The rest of the day, we saw nothing but selling from Rexahn Pharmaceuticals. In fact, the stock ended up closing lower. What that tells us is simply that an army of people were just waiting for any reason to take profits.
Our worry is that even more sellers are waiting in the wings with their shares of Rexahn Pharmaceuticals. Today's selling volume from RNN doesn't compare to yesterday's, but it's still quite strong in comparison to the norm. This stock's just facing a major, hidden headwind.
Over the last few months, RNN has found support around $0.50. That's our downside target for the time being.
If you'd like to know of any changes in our opinion of DPDW, MIR, RNN, and OCNF (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
