As nice as it would be to buy and sell stocks based on their fundamental value, right now, that's just not the kind of environment we're in. We're in a trading environment, where charts mean as much as - if not more than - value. Enter Inuvo, Inc. (AMEX:INUV), Motricity Inc. (NASDAQ:MOTR), and China Shen Zhou Mining & Resources Inc. (AMEX:SHZ). Charts of all three have dropped major hints (good and bad) that traders will want to note.
I know this isn't going to make me many friends today, but I'd be shocked if Inuvo, Inc. shares don't dole out a significant pullback from the current price of $1.63.
All the tell-tale signs of a short-term top are in place. Namely, INUV has soared to steep new highs today on huge volume, only to give most of that up again by returning to the lower half of today's range. It's a hint that all the buyers were flushed out of hiding and into the stock early on, and surprise! There weren't that many of them. Now those shareholders are trapped in an overbought stock, and the only way to get unstuck is by selling it, and starting the very pullback being discussed here.
INUV is web-advertising stock. The company sells access to an analytical tool that allows web advertisers to improve the effectiveness of their marketing campaigns. Revenue-generation hasn't been completely miserable for Inuvo, but the top and bottom lines haven't been reliable enough to justify today's early move.
If you're looking for a place to park some idle cash, China Shen Zhou Mining & Resources Inc. may be a better choice. SHZ shares have been trending lower since early 2011, falling from a peak of $10.84 to a low of $0.19 earlier this month. Since hitting that low, however, we've seen the strongest move in weeks, and the most sustainable one we've seen in months. Translation: If the bears overshot (and it looks like they did), this is the beginning of the correction of their error.
SHZ is a Chinese metals miner. As is usually the case with a small miner (in China, or anywhere else), results have been inconsistent, and profits have been elusive. But, as China Shen Zhou Mining & Resources continues to add mines and increase capacity, the light's starting to appear at the end of the tunnel.
Last but certainly not least, Motricity Inc. is on the move again, in a big way... perhaps too big. Today's 14% gain has carried MOTR over the 200-day moving average line after the stock failed to hurdle it near the end of October.
If this all seems vaguely familiar, it may be because I pointed out this possibility with MOTR on Friday. Shares were trading around $0.62 then, having pushed off a combined 20-day and 100-day moving average line. While it's fun to be right, Motricity may have been a little bullish than I was hoping. Though hurdling the 200-day average is a huge catalyst, I can't help but wonder if the bulls are actually going to need to let it slide back a bit and then regroup before the rally continues. I've got a feeling they will. Still, the bulls have tipped their hand; any pullback is a buying opportunity. I'm not sure I'd buy into the current peak though.