The market has managed to swing back into the back today (for now), but the recovery doesn't preclude the need to stick with the high-odds trades. Among the charts of that ilk are Viking Systems, Inc. (OTC:VKNG), Jacobs Engineering Group Inc. (NYSE:JEC), Hemispherx BioPharma, Inc (AMEX:HEB), and DragonWave, Inc. (NASDAQ:DRWI). Here's a detailed review of each one.
We first looked at
Jacobs Engineering Group Inc. (NYSE:JEC) about
a week ago, mostly to point out that the worst-case scenario wasn't really all that bad, and how the likely scenario wasn't bad at all.
Well, the 'likely' scenario where Jacobs Engineering Group shares find support at around $43.65 didn't pan out.... the stock fell under that mark on Thursday. The 'worst case' scenario looks like it's going to cap losses pretty quickly though - that was the rising support line that prevent JEC from moving any lower than $41.30.
From here I'd have to say Jacobs Engineering Group looked like a strong technical buy. The fundamentals certainly support it... JEC shares sport a sub-15 price multiple on a current as well as a forward-looking basis.
Don't read too much into my bullishness on
Viking Systems, Inc. (OTC:VKNG). It's strictly a 'trade' based on a resurgence in volume from a stock that's traveled from practically nothing to $0.18 in the last five days. It could be at $0.65 tomorrow, or back to $0.00065.... seriously.
That said, this stock does have a lot of things a like from a coin toss. Like I said, the volume we've seen from Viking Systems shares over the last two weeks is a paradigm shift. (Why? I have no idea.) And, VKNG had traded in the $10's at this point in 2007. So, it's not like the stock has to break new ground.... another upside.
On the flipside, I'm not betting my whole IRA on the thing either. Viking Systems simply got my attention, and may be worth a little DD.
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Prior to October 15th -
two days after the peak at $11.62 -
DragonWave, Inc. (NASDAQ:DRWI) was traded so thinly that it may as well have not traded at all. As of the 15th though, things changed on the volume front.
Unfortunately, they didn't change for the better... at least not immediately. DragonWave shares sold after to hit a low of $7.59 a couple of weeks later. Now with all the volatility played out (hopefully), I think we can get serious about DRWI. And so far, the serious play seems to be a bullish one.
I do like the recent rebound from DragonWave, accented by a volume spike (which frequently act as pivots) from the 27th. I don't like the fact that volume has been so weak from DRWI on the way up since then... the one character flaw for this rebound. Nevertheless, I have to call this one a speculative buy. Just keep it on a short leash.
And finally, a follow-up to my bearish view on
Hemispherx BioPharma, Inc (AMEX:HEB) from
October 23rd. Now that the stock is 37% lower than it when after my original call from
October 12th, I think it's time to reverse the stance. In other words, take profits if you were able to short HEB from our recommendation.
There are a couple of related clues here that tell me Hemisphere BioPharma shares are poised for a bounce. One of them is, of course, today's gap. The other is the shape of today's bar we're seeing from HEB. It's a doji, which is frequently associated with a shift in the equilibrium of bears on bulls... a proverbial changing of the guards.
My conviction about the Hemispherx BioPharma rebound here isn't strong enough to actually go long on the stock yet - it's just a retraction and 'take profit' notice on the downtrend. Sit tight... I'm sure I'll have an updated view for HEB within a few days. (By the way, had HEB fallen at a much slower, sustainable pace, I'd probably stock with the trade.)
If you'd like to know of any changes in our opinion of VKNG, JEC, HEB, or DRWI (or if we officially recommend them as
trades), be
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