The market's setting up what looks like it will be the third daily loss in a row, accenting the need for careful selection of trading opportunities. Among the best we see today are EPIX Pharmaceuticals, Inc. (OTC:EPIX), Samson Oil & Gas Limited (AMEX:SSN), Lattice Semiconductor (NASDAQ:LSCC), and Lucas Energy, Inc. (AMEX:LEI). A detailed look at each chart is in order.
A bit of bad news for current owners of
Lattice Semiconductor (NASDAQ:LSCC)... the stock's on the verge if breaking under a key Fibonacci support level. Yes, there's a chance it could rebound instead, but the deck is stacked against that possibility.
Today's low of $2.08 from LSCC is right in line with a 38.2% retracement of the March/September rally. By itself it's no big deal, but notice that Lattice Semiconductor shares also broke under a major support level earlier this week (on pretty strong volume). A little more loss could jump-start another bearish wave.
As for a downside target for Lattice Semiconductor, the 61.8% Fibonacci retracement is resting at $1.69. Considering the first Fibonacci line meant to much to this chart, the other one means just as much. However, it's even more significant when we can see that LSCC founds support in that area back with July's lows.
OK, it's show-time for
EPIX Pharmaceuticals, Inc. (OTC:EPIX). If the stock's going to make a run, it really needs to start here and now.
We actually put a bullish spin on EPIX Pharmaceuticals back on
October 19th. What we liked then was a surge in the share price with a surge on volume. Our only concern at the time was simply the possibility that EPIX would fail to follow-through after becoming so overbought. And sure enough, we saw the stock dip - EPIX peaked at $0.169 that day, and hit a low of $0.043 the next day.... nothing unusual for a stock that jumps like this one did.
The true test comes the next day - will the stock's previous buyers come back for more? If they do, then the 'second wave' of buying is the one you want to step into. Well, though I've still not seen the increase in buying volume I'd like to see from EPIX Pharmaceuticals, I think it's interesting that the selling volume three and four days ago was light, and getting lighter. The next time we actually see a true accumulation day, I'd consider that a strong buy signal. (It may be today/)
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This is actually a pretty simple trading setup....
Lucas Energy, Inc. (AMEX:LEI) has blasted past the resistance side of a wedge shape. The volume behind the move says to take it seriously.
Our chart of Lucas Energy shares says it all. Lower highs since May ad higher lows since March were forcing LEI into an ever-narrowing trading range. The pressure finally turned strong enough to squeeze the stock out of those confines.
The compelling part about this chart, however, isn't just that Lucas Energy is staging a breakout. It's that LEI was trading in the $6's a year ago. There's a ton of room for this stock to recover by building on today's breakout effort.
The only thing to watch it for is potential resistance around $1.12, where the rally stalled in May and June (and seems to have faded from today).
And finally,
Samson Oil & Gas Limited (AMEX:SSN) has done exactly the opposite of what I expected it to on
October 15th. Rather than find support at the $0.30 area and move back up to just under $0.70, support at $0.30 broke down and let SSN move to a low of $0.26 today.
While I'm hesitant to switch gears a the drop of a hat, I think a willingness to turn bearish on (short) Samson Oil & Gas Limited is at least worth keeping in the back of our minds. Though SSN is fighting to get back above $0.30 right now, the heavy selling volume suggests there are a lot of willing sellers out there who would gladly get out at anything over $0.33-ish.
Let's play it like this.... if Samson Oil & Gas Limited closes under $0.26 anytime within the next few days, we'll consider it a sell signal, assuming SSN is gong to accelerate lower once new multi-year lows are hit.
If you'd like to know of any changes in our opinion of LSCC, SSN, LEI, or EPIX (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
