Start the New Year Right (no matter what kind of trader you are) With ALJ, DVOX, and APKT
No matter what your timeframe is, between Acme Packet, Inc. (NASDAQ:APKT), DynaVox, Inc. (NASDAQ:DVOX), and Alon USA Energy, Inc. (NYSE:ALJ), there's something for every trader and every tolerance. 
Some of you may recall that I actually posted a bullish outlook on Alon USA Energy, Inc. back on December 21st, when it was trading at $15.12. Most readers/traders didn't seem to think much of it at the time, unimpressed by the way ALJ had broken through a ceiling to reach the $15.12 mark. Now that the stock's at $16.68 today, however, (up 10% from where I called it), more traders have become interested.
The question is, now what? There's little denying ALJ is in rally mode. But, there's also no denying it's overbought and ripe for a profit-taking pullback. The answer is, wait. I still see plenty of upside in store here, as the stock's been consolidating since September, and really, has been penned up for years. The trouble is, Alon USA Energy is still overbought in the short run, and could fall back to the $15-ish area without a second thought. Wait for a good short-term dip before stepping into the long-term uptrend. 
For some perspective on what may need to happen to Alon first, take a look at Acme Packet, Inc., as it's already been through it. The rally all the way up to a peak of $22.31 in early December was followed by a cooling period in mid-December that pulled APKT all the way back to a low (reached today) of $22.04. Take a look at what happened once $22.04 was reached [not to mention the 50-day moving average line] though. A switch was flipped, and put the stock back into bullish mode, pretty decisively too.
To realty appreciate just how big the potential upside from APKT is, however, take a look at this longer-term weekly chart. This stock has been in a nosedive since May of 2011. It's only been since July that the stock's started to perk up, and it was only a month ago that the turnaround was confirmed via higher highs and higher lows that finally pulled Acme Packet above its 200-day moving average line for the first time since the first half of 2011. Yet, the stock's still trading at only 1/3 of its pre-meltdown value, meaning there's tons of room to keep rallying.
Last but not least, DynaVox, Inc. has hurdled a major resistance level, clearing the way for a breakout effort. A couple of weeks ago the stock fought its way above the 20-day moving average line to start pressuring the 50-day moving average line. Well, as of today DVOX has cleared the 50-day line too. Given how long it's been beaten down, this small move could jump-start a surprisingly big recovery.
DVOX is a software company that specializes in helping people with physical speech or auditory challenges to communicate more effectively. The stock's retraction since 2010 has loosely mirrored the company's dwindling top (and bottom) line. But, DynaVox is finally at that point where things likely can't get any worse. In fact, analysts expect next year's revenue to match this year's, and they expect next year's per-share income to double from this year's. It's still just speculation, but a plausible and encouraging one.
James E. Brumley is a paid contributor of the SmallCap Network. James E. Brumley's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
Do NOT buy or sell APKT, DVOX or ALJ until you have read everything.
SmallCap Network provides comprehensive research and opinions on APKT, DVOX and ALJ. |
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| Date: | May 24, 2013 | |
| Price: | Free | |
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