Sep 3, 2010 9:02 AM PDT
The fact that H.J. Heinz Company (NYSE:HNZ) is down today isn't what concerns me - plenty of stocks are down today despite the broad market being up. Moreover, the minor 0.6% dip from HNZ barely even registers as a loser. It's the fact that this stock has been sinking modestly for several days now, and as a result has fallen under a key support line that goes all the way back to March of last year.
The chart below says it all - something is clearly different for H.J. Heinz shares now, having fallen under a strong and persistent rising support line (blue). I could have forgiven the early May blip, but to see the HNZ come back for more in a methodical way a couple of weeks later? This is a paradigm shift.
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Rambus Inc. (NASDAQ:RMBS) although not a small cap either, is much closer to being one than Heinz is. In any case, RMBS made its way onto my radar today after showing up as one of the most bullish picks among the stock trading message board users. You know how I feel about the boards - it's a perfect contrarian tool. When they're most bullish, I'm most bearish.
It's not just an "I'll show you" defiant attitude that's got me looking at Rambus in a bearish light though. Take a look at the weekly chart below. Clearly the bullish momentum has tapered to nothing as the ceiling around $25.90 has stepped up again. Factor in all that confidence, and what you have is a recipe for a surprise pullback.
Well, I had a feeling this is what we were going to see from Cyclacel Pharmaceuticals Inc. (NASDAQ:CYCC). Now we know for sure. This small cap is stuck in a range (again) and as a result, CYCC isn't really trade-worthy until it breaks out of the rut.
The Cyclacel Pharmaceuticals chart below is pretty clear. The $2.31 mark, which used to be a support line, has apparently become resistance. The floor at $1.78 still stands. That 'zone' is marked in orange on the chart. Volume (both bearish and bullish) has been tepid for CYCC for quite some time now, so we could be stuck in the mud indefinitely.
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