The early euphoria has already faded a little, though stocks remain in the black for the day so far. The bigger uptrend for the large cap indices, however, remains in question. Conversely, several of the small cap names we've run across today look like they're building up a bullish move. Of course, some of them are looking less than healthy right now. Let's look at Entegris, Inc. (NASDAQ:ENTG), Advanced Semiconductor Engineering (ADR) (NYSE:ASX), and Bioelectronics Corp (OTC:BIEL), and see where each stands on the buy/sell scale.
I posted a conditionally-bullish view of Bioelectronics Corp (OTC:BIEL) back on March 9th . While the stock's not necessarily moved all that much since then, enough good things have happened for this chart for me to (1) reiterate and update my original points, and (2) upgrade my outlook to a speculative 'buy'.
In short, this small cap survived the bearish pushback effort we saw materialize shortly after March 9th - after BIEL made a nice, strong move above a long-term resistance line. In fact, we've seen Bioelectronics establish a new - and slightly rising - support line over the last month or so. The trading trifecta is almost complete with today's upward move. If this chart can clear resistance at $0.37 on a closing basis at some point within the next few days, I think we can then safely say the tide has turned.
In a semi-related note, part of the reason I'm still so compelled by Bioelectronics Corp. as a long play is the persistence with which the buyers keep coming back. All throughout March, we saw strong accumulation (volume) on the up days, and weak volume on the losing days...which were modest losses in all cases. Best of all, none of this has been news-inspired.... BIEL is rising organically, which means longevity.
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I know the mass opinion of Entegris, Inc. (NASDAQ:ENTG) right now is that it's a bullish stock just going through a volatile patch. I can see how one would come to that conclusion. The more I look at a chart of ENTG though, the more I'm convinced it's stagnant at best, and possibly slipping into a downtrend, at worst.
In short, Entegris isn't making higher highs anymore. It's not making higher lows either. In fact, it's specifically making lower highs. After peaking at $5.75 in late December, we've seen this small cap struggle with horizontal resistance at $5.33... and it's been plenty content to continue to use that new falling resistance line as a bearish guidepost.
There's a last-ditch bullish hope waiting for ENTG at $4.72 - that recently-develop (short-term) rising support line. Given the scenario though, I've got a feeling the longer-term trend of lower highs will mean Entegris, Inc. is going to blow right past that support and make its way towards the floor at $3.62.
One thing at a time though.
I wouldn't necessarily buy Advanced Semiconductor Engineering (NYSE:ASX) today. In fact, I specifically wouldn't buy it today, as I suspect you'll be able to find a slightly better price in the near future. However, I do think today's strength is the final layer of evidence we need to say ASX is bullishly breaking out of its range-bound rut.
There are actually two forces at work here with ASX. The first one is the horizontal trading range (framed in blue) we've seen this small cap bounce around in since October, with the short-lived pop in late December being the only exception. The lower line is at $3.86, while there are two upper ceilings....$4.49, and $4.69. Advanced Semiconductor Engineering shares are knocking on the door of the upper resistance line today, though I'd say clearing $4.49 was enough to constitute the end of consolidation and the beginning of a major move higher.
The other force at work here is the bullish trading range we've seen push Advanced Semiconductor Engineering higher since March of last year; it's framed in orange. I don't think it's a coincidence that ASX didn't get on its horse and go until the rising support line and the horizontal support line teamed up around $3.90 in early February.
As for timing any entry, I hate to step in at what's likely to be a short-term high. Let's see if ASX can ease back to the $4.50-ish area and renew the breakout move there.
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