Oh So Close! PRMW, CNAM, and TELK Are on the Verge

Dec 10, 2012 9:37:35 AM PST | 539 View(s) | No Comment(s) - Post a Comment Rating

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StockHQ:

CNAM
$0.32 -$0.01 -1.64%
PRMW
$1.58 +$0.02 +1.28%
TELK
$1.30 -$0.02 -1.52%

They may not be off-to-the-races just yet, but China Armco Metals, Inc. (AMEX:CNAM), Primo Water Corporation (NASDAQ:PRMW) and Telik, Inc. (NASDAQ:TELK) are awfully close to breaking out. Here's a closer technical look at each, and what it's going to take to get them over their respective humps.

The last time I looked at Primo Water Corporation was back on November 5th, though not for a chart-based reason. Back then I was simply making the point that the sellers had excessively taken the ball and run with it, assuming that anything good for sort-of-competitor SodaStream had to be bad for PRMW and its investors. As is so often the case though, the market overshot with its pessimism. As of today though, we can see there's a light at the end of the tunnel.

How so? While the 10% jump is nice, the move actually just puts the exclamation point on a turnaround effort PRMW has been working on since - ta-da - early November. Although the stock peeled back a little from that early November surge, since then it's curled upward, making a bowl-shaped turnaround that's pulled the stock within reach of the all-important 200-day moving average line (dark blue). If Primo Water Corporation can just hurdle the 200-day mark at $1.40, life would get much easier for the bulls.

China Armco Metals, Inc. has made a similar (albeit it inconsistent) bowl-shaped turnaround since August, slowly approaching its 200-day moving average line as well. Though we'd seen hints of strength in the form of pushoffs off the 20-day and 50-day moving averages, the fact that the 200-day moving average was such a big problem for CNAM in September has likely kept the bulls at bay. In the meantime though, a couple of bullish clues have popped up.

One of them is growing bullish volume, which become 'convincing' with today's bullish pop from CNAM (which seems to have started with a pushoff of short-term key moving averages). The second clue is the fact that we can now see that there's a long string of higher highs and higher lows. If China Armco Metals can just get over that 200-day moving average line at $0.463, then the floodgates could really open.

Last but not least, Telik, Inc. has perked up over the past week and a half after a multi-week lull. It wouldn't be that big of deal had TELK (like China Armco Metals and Primo Water) made the move on increasing bullish volume and (also like PRMW and CNAM) approached the critical 200-day moving average line as a result of the effort. But, it is what it is, and I call 'em like I see 'em.

TELK had a problem with its 200-day moving average line back in May, brushing it once following a surge and then turning tail and moving lower than where it started that surge in the first place... a textbook profit-taking tumble (and subsequent meltdown). This time though, the pace Telik, Inc. is making is much more sustainable. Just wait for the $2.62 level to be cleared.

Bryan Murphy is a paid contributor of the SmallCap Network. Bryan Murphy's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.