Sep 3, 2010 9:02 AM PDT
While a handful of stocks have managed to make their way into the black today, those stocks really aren't the highest-potential ones the market's got in the oven. Here are three small cap stocks to watch, as monster moves could be around the corner with just one more met milestone.
When I last looked at NMT Medical, Inc. (NASDAQ:NMTI) back on June 21st, I put it in a bullish light, as I expected the $0.52 line to continue acting as a floor. Well, it did for a few more days, but by late June the support there had snapped and this small cap fell under it - to as low as $0.41. Funny thing though.... former support lines can become important resistance lines... and resistance lines were meant to be broken.
That's my clever way of saying NMTI is itching to break out, and the new ceiling at $0.55 is the make-or-break point. The chart below says it all. NMT Medical has been in a sideways mode since the middle of last month, but the bulls are testing the waters. A couple of good sessions or big trades above $0.55 or so should jump-start the move. Keep it close.
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I've spent a good part of the last four days waiting for Pacific Ethanol Inc (NASDAQ:PEIX) to crumble again, as it has after every bullish effort for weeks. You know what though? It hasn't happened yet.... and it may not. This is one of those cases where the way things appear to be is actually the way they really are - PEIX is oh-so-close to going from good to great.
Specifically, Pacific Ethanol is knocking on the door of a breakout. The straight-line resistance (black) has already been knocked out of the way, and the 50-day line (purple) - under attack today - is also on the verge of crumbling. Buying volume's picked up too. And needless to say, there's not really any major resistance in sight for a while. The 200-day line lies at $1.08, but really, I don't think it would be wrong to shoot for the $1.75 area, where a gap still lingers. Getting to $1.09 is the key/catalyst though. 
And finally, Rexahn Pharmaceuticals, Inc. (AMEX:RNN) is getting closer and closer to breaking out of a converging wedge (blue). In fact, this small cap will be forced out of it - one way or another - by tomorrow, as the wedge is now at a point. If my instincts are on target, it should be a bullish move.
Why do I think that? For one thing, RNN has already tested those waters over the last two days. The big reason I'm looking for the squeeze to send Rexahn Pharmaceuticals upward, however, is that this chart already punched though another falling resistance line (orange) a few days ago.
It would still be prudent to wait and see what happens now that the market's hand is being called, but you'll have an answer soon enough. 
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