With the broad market poised for another lethargic day of indecision, traders are forced to dig deep for trading ideas. Among today's most-watched (and most likely to move) are Real Goods Solar, Inc. (NASDAQ:RSOL), Vringo, Inc. (AMEX:VRNG), and Net 1 UEPS Technologies Inc. (NASDAQ:UEPS).... for better or worse. Each has dropped a key technical clue of some sort that may end up being bigger than it seems to be right now. In no particular order...
Frankly, while I was pretty confident the discussion wouldn't end after Vringo, Inc. landed a pseudo-victory over Google Inc. (NASDAQ:GOOG) back in mid-November, I was expecting the heated, name-calling, and sometimes untruthful arguments between the shorts and the longs to cease, as there was little left to fight about. Guess I was wrong, because the debate's still raging, at least judging from the comments in response to this recent commentary about VRNG posted at - no surprise here - Seeking Alpha. [The commentary is said to be the reason the stock slumped yesterday, but that's not likely to be the entire truth.]
Well, I've got some bad news for the VRNG longs. The bears have been chipping away for a couple of weeks now, but as of yesterday pushed the stock under the key 200-day moving average line, confirming that the lack of overall progress has now reached bigger-picture proportions. The bears followed through today.
The Vringo bulls will likely be quick to point out that this play isn't about charts or trends or fundamentals or growth. Rather, owning VRNG is all about winning patent trials. I don't disagree. I'm just saying, the chart is a reflection of the majority opinion on a stock, and the majority opinion on Vringo Inc. right now is turning decidedly bearish (and that's not up for argument - it is what it is).
Could the majority be wrong? Sure, anything's possible, but in a high-profile story like this one, it's not likely the majority is missing any key facts. Regardless, if we see another lower close (under Wednesday's close of $3.15), that could really start a fire-sale, as people were already expecting such great things from this story stock... and we've already seen a lower low today. Disappointment can be a stock-killer; all VRNG needs is one more nudge in that direction.
If you're looking for a high-odds long, take a look at Net 1 UEPS Technologies Inc. The stock got crushed on Tuesday, falling from $7.84 to $3.22... a 59% drubbing following news that it was being investigated by the Federal Government for potential securities fraud. Generally speaking, where there's smoke there's fire. On the other hand, there tends to be far less fire than the market first assumes. That means the UEPS sellers may have overshot.
And, the potential rebound started to materialize on Wednesday, and followed through on Thursday. UEPS gave us a bullish inside day yesterday (where the high and the low are fully inside the range of the prior day's open and close), and in this case, pushed the stock in the counter-direction. Today's follow-through cements it in place. That's not to say Net 1 UEPS Technologies Inc. is a long-term buy here, but the chart has set up a solid near-term trade.
Last but not least, Back on November 29th I posted some bullish thoughts on Real Goods Solar, Inc., guessing the doji bar from that day (on huge volume) meant the long downtrend from RSOL had finally spent all of its fuel, and it was time for a bullish pivot. Although the stock petered along for a few mores days after that, things finally charged - in my direction - yesterday. The stock's now at $0.55, up from the price $0.46 when I first pointed it out.
But isn't RSOL in the hole by 8% today? Yes, it is, but if any stock deserved a break, it's this one. I'll give it the short-term leeway it wants, since the flag it planted yesterday was a long-term bullish one. Once again we saw a huge amount of bullish volume behind Real Goods Solar, and after a 16-month slide, there's got to be a ton more upside packed in here.