Following Tuesday's volatile - and bearish - trading session, Wednesday should offer some interesting trading opportunities.... some bullish, and some not. Of the equities that seem most trade-worthy Rentech, Inc. (RTK), GenVec Inc. (GNVC), Applied DNA Sciences Inc. (APDN.OB), and Kellogg Company (K). Here's what you need to know.
It's not too often a breakfast cereal company like
Kellogg Company (
K) makes a 'hot stocks' list, but that doesn't mean it's not deserved. Kellogg fell back into focus - along with most consumer staple stocks - when it seemed as if the market was going to you-know-where in a hand basket. It's a typical reaction to a strong selloff.
Though the market may hand us a dead-cat bounce today, a migration into K shares or other consumer goods names for the duration of the month may not be a crazy idea. Two drastic selloffs this week have verified that the market is not infallible, and factoring in the usual September weakness suggests that K shares may well be a smart defensive posture.
We're not going to set a target price for Kellogg Company shares, as they may not move fast enough or far enough to worry about a target. The stock does, however, appear to be one of the relative safer best at this point.... perhaps a multi-week holding. If K continues to perform well though, the short-term trade could turn into a longer-term position.
We took a bearish stance on
Rentech, Inc. (
RTK) back on August 26th when RTK was trading around $1.95, and we've had no regrets in doing so. Though the bearish gain has been minimal, more downside movement may be on the way.
The last bastion of hope for Rentech is support at $1.83, where RTK bottomed three times within the last two weeks. If that line cracks, however, there are three looming gaps that are itching to be filled. The lowest of those three is at the 50 cent mark.
One thing Rentech shares have going in their favor is that the recent dip has been made on lighter and lighter volume.
Side note: The kiss of death for Rentech Inc. may have been the Motley Fool curse. During and following the skyrocket rally from $0.49 to a peak of $2.93 for RTK, The Motley Fool published no less than four encouraging commentaries about Rentech, fueling the buying without ever really asking if it deserved to rally to new highs.
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Trading Alerts for GNVC, APDN, K, and RTK.-------------------------------------------
Though a daily chart of
GenVec Inc. (
GNVC) doesn't look all that encouraging, zooming out to a weekly chart is downright discouraging. It's on the weekly chart we can spot this stock's bigger problem.... a long-term resistance line that's capping any rally effort. It's currently at 93 cents, and falling a little every day.
Simultaneously, GenVec shares have been finding some horizontal support around the 64 cent mark; that will need to hold if GNVC is to stay in the hunt to finally break above that long-term ceiling. Should support at 64 cents break though, the stock may find its way back to multi-year lows around 35 cents.
By the way, the buzz (albeit from the message boards, which aren't always correct) is that the only reason GNVC managed to hold up as well as it has of late is the result of a savvy stock-promotion effort; the company needed to raise about $6 million, and the firmer the stock's price is, the easier GenVec can raise money.
The tactic can neither be confirmed nor denied, but it is a possibility. If it was indeed the case, then the apparent GNVC strength was artificial, and could vaporize soon.
And finally,
Applied DNA Sciences Inc. (
APDN) is worth watching today primarily because the company was the subject of a major stock-promotion effort. That's not a bad thing or a good thing, but it could make for a lot of volatility early in the session. Just be careful.
If the name Applied DNA Sciences rings a bell, it's because the Small Cap Network has been covering it for a couple of years. And, our readers have made good money by trading APDN a couple of different times (mainly early this year). Though we haven't seen much n the way of trading opportunity in the last couple of months from the stock, the last three days suggest APDN is gearing up for another trade-worthy run.
The one thing we don't want to see is a big bullish gap at the open for Applied DNA Sciences, though it's a distinct possibility when a stock's being touted by so many investor awareness companies at the same time. If that happens, don't feel like you have to own APDN at any price - be patient. If it's a nominal open though, this micro cap stock appears to offer a great deal of short-term upside.
If you'd like to know when or if we issue trading alerts specifically for RTK, GNVC, APDN, and K, then be sure to subscribe to our free e-newsletter. It's delivered two to three times per week.
