Although most analyst and fundamentals-oriented investors will disagree, where a tock's been can tell you a great deal about where it's going. That's what makes Zagg Inc. (NASDAQ:ZAGG), VMware, Inc. (NYSE:VMW), and Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) such interesting names today. Charts of each - long-term charts - have dropped some pretty telling clues about what to expect next.
It's a little bit evident on the daily chart, but to really appreciate the headwind VMware, Inc. is starting to hit, you have to check out this weekly chart. In simplest terms [and this is clear in just the nearby daily timeframe], VMW struggled when it pushed up and into its 200-day moving average line, and worse, has faded since mid-December. It matters because [and here's where you have to see a weekly chart to understand], the stock's made a string of lower highs for the first time in years after things got very volatile - though still bullish at the time - in 2011.
Yes, VMWare still looks like it's got a shot at rebounding. Take a closer look though. Specifically, take a look at the direction both the 100-day and 200-day moving average lines are pointed - downward. That's the first time in years both have been sloped this low for this long, suggesting the weakness is no small matter. What stinks is that VMW is a profitable company, and has even continued to grow profits. But, even with strong profit growth, the fact that VMWare shares are still trading frothy P/E ratios (forward-looking of 28.3) is starting to take a toll; the chart says the market is getting tired, and anxious.
With just a quick glance at Zagg Inc. it's pretty clear there's a bullish undertow in play. The stock made a nice V-shaped reversal in mid-November, and after a small pullback in late December has rekindled that bullish effort. ZAGG has even pushed above the 100-day moving average line today, after struggling with that level in mid-December. Point being, this stock is as good as it looks. It's not until you look at the weekly chart, however, that you can appreciate how good it looks, and the full reason why it looks so good.
That reversal ZAGG made back in November? As it turns out, that wasn't just some random reversal of fortune. That happened at a major floor for this chart that extends all the way back to the major low from March of 2011. Both prior tests of this support line led to huge rallies for Zagg Inc. That doesn't guarantee one is in the making now, but it sure doesn't hurt the odds either.
Finally, a simple and straight-forward look at an emerging (and obvious) breakout effort - Progenics Pharmaceuticals, Inc. Like ZAGG and VMW, you can see this effort from PGNX with a daily chart. But, it's the weekly chart that really puts things in perspective.
For starters, the pivot bar from early November is a clear hammer-shaped bar, and formed a solid V-shaped reversal around it. Better still, that upward-sloped second half of the V from PGNX since then has carried the stock above the 100-day moving average line. What's really compelling, however, is the sheer scope of the plunge in the middle of 2012. Even as firmly as Progenics Pharmaceuticals has rallies since November, there's still a ton of ground to make up before the bulls even think about getting nervous.