When an investor can get an accurate read on a company's current and future fundamentals, it's a high-odds opportunity. When the same investor can time a trade using the stock chart's clues, the odds of success get even better. With that in mind, here's a closer inspection of Harvest Energy Trust (HTE), Dendreon Corp. (DNDN), and Las Vegas Sands Corp. (LVS). Each chart is dropping some important hints.
The efficacy of
Dendreon's (
DNDN) prostate-cancer treatment Provenge can't be denied, but it's value can be overestimated. Recently, the company boldly -
perhaps recklessly - predicted
Provenge will eventually dominate the prostate cancer market. Perhaps it will, but considering it extends patient life by four months versus the two and half extra months added by its competing drugs, the wild demand may not materialize the way the company suspects.
And, perhaps that confidence in its future is a contrarian clue that DNDN shares have hit a major top, and are now on their way down again. It certainly wouldn't be the first time it's happened.
Though the daily chart of DNDN is mildly troubling, the monthly chart fully illustrates the kind of problem Dendreon's investors may be facing now. March's Provenge announcement made the stock an overnight success, but the actual gain since then has been nil. In fact, the top-out around $25 was in line with the peaks from 2000 and 2007.
Yes, things are different now.... Provenge is in hand. Things were 'different' back in 2000 and 2007 too though. That's just biotech -
unmet expectations are a powerful force. ----------------------------------------------------------------------
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It looks like a $55 million investment in Empire resorts Inc. (NYNY) has offered hope for other casinos, including
Las Vegas Sands Corp. (
LVS)... not that it necessarily needed the help. LVS shares, however, may need that help about $1.15 from where they are now.
After being decimated last year, Las Vegas sands shares have been crawling out of a deep hole. In the process, key support and resistance lines have been defined.
It just so happens that LVS is within striking distance of that upper support line; breaking above it could accelerate the rally quite a bit. Or, that resistance could simply send the stock lower when it's tested again. Where will it be tested? Probably around $14.50.... which is $1.15 more than where the stock's trading now.
Investors shouldn't count -
or trade - unhatched chickens, but Las Vegas Sands and its stock have two things going for them. One, the casino company is
sitting on a lot of cash, and two, the stock's close to being
listed in Hong Kong.
Not that investors haven't seen head-fakes from
Harvest Energy Trust (
HTE) shares before, but if the rally over the last few days is just another fake-out, it sure is a convincing one.
In short, HTE has broken out of a wedge, to the upside. The stock hasn't really gone anywhere
since then, but that also means it hasn't fallen back. Even if it
did pullback to it at $5.22 though, the breakout would still be intact.
Though volume is still a little light to suggest buying is 'strong', it's not been weak either. Harvest Energy Trust has some things going for it that investors tend to like.... like a 9.3% dividend yield. So, volume should improve as the stock inches higher.
While 2009 was not a great year for energy trusts -
including for Harvest Energy Trust - a recent oil-pricing outlook from UBS suggested that crude was going to rise and stabilize into next year. Simultaneously, Harvest's recent acquisition of most of Pegasus Oil and Gas Inc. should boost production by 650 boe/day.
In short, following a two-year drubbing, the break above resistance for HTE could be the start of a recovery.
If you'd like to know of any changes in our opinion of these three stocks (or if we officially recommend them as trades), be sure to sign up for free newsletter today. It's delivered 2 to 3 times per week.
