Digging Deep Into the Charts: MTLK, MDW, ARRY and ACHN

After perusing my usual daily screens, I came up with four stocks that have gotten me pretty excited for potentially excellent trades to the long side in coming months ahead. Metalink, Ltd.(Nasdaq: MTLK), Midway Gold Corp. (AMEX: MDW), Array BioPharma Inc. (Nasdaq: ARRY) and Achillion Pharmaceuticals, Inc.(Nasdaq: ACHN) all suggest a technical hint that this just may be the beginning of some sustainable moves to the upside for each of these small stocks.

Let's begin with Metalink, Ltd. (Nasdaq: MTLK). Rather than dive in and waste my time discussing the recent events that have driven shares of MTLK through the floor, I think it's more important to note that rarely in the market does anything last forever. Metalink, Ltd. has been on a significant landslide since August of '07. Why? I don't really care. What does interest me is shares of MTLK have traded sideways for well over a year now, but the last few months of unusually high volume suggests we could be in the early stages of a serious reversal. Couple this with one of my favorite buy signals, the famed Dinapoli "Double Repo" and what we have on this same monthly chart is an effort by MTLK to break back above the 3x3 DMA for the second time in recent months. If MTLK can close above the 3x3 DMA on the monthly chart this month, I think we could be off to the races. You heard it here first.

Midway Gold Corp. (AMEX: MDW) paints a different picture. I've been trading for well over 10 years now with a fairly high degree of success and something I've noticed over the years is stocks love to blow off on huge volume and put in one big new low before gathering steam and heading straight back up the charts. Some call it capitulation... whatever you want to call it is fine with me. I'm a big believer stocks love to head fake hard before long term sustained moves to the upside. Shares of MDW did just this back in October of last year (as did many others), however, since that blow off bottom, Midway Gold Corp. has traded nicely to the upside in what I call a thrusting fashion ever since. Picking up MDW on pullbacks to your favorite moving averages may prove prudent toward $1.87 which would be a nice 3/8 retracement of the top put in at $4.75 back in late '07. A double in Midway Gold Corp. from current levels wouldn't be a bad thing.

With respect to Array BioPharma Inc. (Nasdaq: ARRY), read my previous paragraph on MDW. If ARRY isn't a classic case of this, then I don't know what is and what makes shares of ARRY even more compelling right now is the huge volume spike we've seen over the last few days to the upside. I know they've got news... whatever. Is it a coincidence that Array BioPharma Inc. is trading on massive volume only a few short days after putting in an all-time low? Hardly. I love trades like this as I see them being low risk opportunities as long as one is willing to maintain discipline with their stops. If the last few days of big volume in shares of Array BioPharma Inc. can spark some enthusiasm, this could be the beginning of much better things to come for ARRY.

Now let's get to Achillion Pharmaceuticals, Inc.(Nasdaq: ACHN) before I put you to sleep. Let me first begin by saying if you think I'm suggesting a purchase of ACHN based on today's gap up, you're crazy. I'm looking at the long term chart of ACHN here and what the last few days of big volume may be suggesting. Back in '07, Achillion Pharmaceuticals, Inc. came out firing trading as high as $20.00 per share only to continue a nasty decline that has lasted over two years. If you're a contrarian, then you'll agree the Street loves to sell when everyone's in love and loves to buy when nobody cares. I believe this just may be the case now for shares of ACHN. If we can manage to pick up some Achillion Pharmaceuticals, Inc. on a pullback of this recent exuberance, I think ACHN may well be on its way to a 3/8 retracement of the whole leg down, which puts my target just above $8.00 per share. Now that would be a winner.

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