Chart Analysis of GNVC, ZHNE, and SIRI

The market opened firm this morning, and is taking most stocks with it. While we have our doubts about the rally's overall longevity, a few stocks look like they're setting up bullish moves that could survive a market retreat. They include Zhone Technologies, Inc. (NASDAQ:ZHNE), Sirius XM Radio Inc. (NASDAQ:SIRI), and GenVec, Inc. (NASDAQ:GNVC). Here's a closer look at each one.

We've been round and round with Sirius XM Radio Inc. (NASDAQ:SIRI) over the last few months, mostly bullish, and usually right. Today's move is yet-another one of those likely (trade-worthy) breakout moves.

The chart below shows a pretty clear triangle formation for Sirius XM Radio shares. More importantly, the breakout move from, SIRI occurred shortly after support was retested, and the stock was nearing the point of the wedge - meaning it would be hard for Sirius to slip back into the narrow confines of  the triangle.

I won't set a hard target for Sirius XM Radio, but I will mention that the last couple of these wedge/breakout moves have carried SIRI as much as 40 cents higher from the low point right before the breakout started.


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We've also looked at Zhone Technologies, Inc. (NASDAQ:ZHNE) a couple of times in recent weeks. My projections were right, but my timing was bad - if I recall correctly - in both cases. This time, however, I think the planets are lined up in such a way that will make it hard for the stock to move anywhere except higher.

The key is the original support line that extends back to lows Zhone Technologies shares hit between April and August. It hasn't been touched since then, until ZHNE finally pulled back to that level last week; perhaps that's all that was needed, as we're seeing a strong, high-volume push off that line today.

I don't want to set a target for Zhone Technologies either. I think the $0.80 are could be a turbulent level though... perhaps enough to bring an end to any short-term rally.


Nobody's happier than I am that GenVec, Inc. (NASDAQ:GNVC) popped from $0.80 to $1.00 at the open today. Yet simultaneously, nobody's more frustrated about the big gap it left behind. See, we've got an official trade open on the stock. While I have faith in the potential upside, these big gaps have a way of ruining an otherwise stable trend.

In fact, we can already see the results of the GenVec, Inc. jump - GNVC shares have done nothing but fall all session long, and are currently at $0.89 (which just so happens to be where we bought it). The problem is, there's still more gap to be filled.

At this point, though I don't encourage anyone to sell their GenVec shares (even at a profit), I certainly don't encourage you to buy any. The move was a positive event in that it shook GNVC out of a rut, but it could be days before the stock settles back into a bullish groove.


If you'd like to know of any changes in our opinion of ZHNE, SIRI, or GNVC (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.