The market's headed to a slightly bearish end of the week, though the bulls made tremendous progress during the prior four days to keep stocks above last Friday's levels. Still, this is no time to take swings on mediocre trade setups. Among the better trading ideas we've come across today, Active Power Inc. (ACPW), Cardium Therapeutics Inc. (CXM), EntreMed Inc. (ENMD), and VeriChip Corporation (CHIP) are the most attractive. Here's a technical look at each chart.
Though it was the daily chart that gout our attention, we want to show you a weekly chart of
Cardium Therapeutics Inc. (
CXM)... just so you can appreciate the scope of the looming pullback.
Our primary sell signal for Cardium Therapeutics shares is a MACD crossunder. Normally we're not fans of MACD, as the market's just too volatile and inconsistent to use such a lagging indicator. CXM has been an exception to that rule though, in that it does indeed tend to move as suggested by crosses of its MACD lines. You'll also see that the selling volume has picked up, and it about as heavy as any volume we've seen from Cardium Therapeutics shares.
This penny stock may not find support again until it hits December's lows around $0.50.
This isn't our first look at
VeriChip Corporation (
CHIP), and it probably won't be our last either.
Our first look was on September 25th when we took a bearish view of VeriChip shares after they formed a wedge shape. The momentum was technically bullish at the time, but CHIP had surged to a ridiculous high, and didn't follow up that buying with any volume. Sure enough, the stock fell from $3.39 then to the current price of $2.30 (and well under the support side of the wedge).
That resistance line was tested again on Wednesday, and VeriChip failed to move back above it again then.... shares just got sent lower. In fact, the rollback from that line was on high volume - a strong clue that more sellers are waiting in the wings.
From here, VeriChip still appears to be en route to close the September gap at $1.22.
----------------------------------------------------------------------
Sign-up for Free to Receive Future Commentary and
Trading Alerts on ACPW, CHIP, CXM, and ENMD. ----------------------------------------------------------------------
Active Power Inc. (
ACPW) is trapped between a rock and a hard place. Under the stock we see a couple of major support lines (blue), but overhead is the first of the major Fibonacci retracement levels. The stock took a swipe at that Fib line this week, but we're not surprised to see it fail to actually hurdle it.
The high-volume pop from Active Power shares is a good sign, but it was made without the best of foundations. This chart needs to retreat and regroup, and then take another, more methodical shot at cracking the ceiling at $1.10. At this point, investors are still worried that ACPW is simply volatile - not bullish.
If the resistance at $1.10 can be broken, then the next hurdle for Active Power shares is $1.62... the 61.8% Fibonacci line. That area was also a problem for ACPW in June of last year.
Finally, this is not our first discussion of
EntreMed Inc. (
ENMD), but it may be our last. Our first look was on October 5th, when we suggested the push above the resistance side of a triangle shape was a hint of a breakout. Well, guess what...... EntreMed shares broke out with a vengeance. ENMD moved from $0.53 that day to the current price of $0.93.
At the time we hypothesized that EntreMed would struggle around $0.80, as it had in May. While our bullish idea was right, our target was not aggressive enough in hindsight ($0.93 versus $0.80).
Regardless, we still view this as a profit-taking opportunity not to be passed up. If you took the EntreMed trade based on our recommendation, we now recommend you get out.
If you'd like to know of any changes in our opinion of ENMD, ACPW, CHIP,, or CXM (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.
