Technical Forecasts for QXM, YRCW, and AVOE

Stocks slipped into the red today with little resistance from the bulls despite the strong open. It's not a tide traders should face without the best of the best opportunities. On that note, YRC Worldwide Inc. (NASDAQ:YRCW), Qiao Xing Mobile Communication Co., Ltd. (NYSE:QXM), and Avro Energy Inc. (OTC:AVOE) may well be those stocks.... two of the three charts look more bullish than bearish.

I actually mentioned Avro Energy Inc. (OTC:AVOE) was a bullish possibility on the 22nd, when it was trading at $0.70. A few hours later in the same session, the stock was trading at $1.27. Great. Five days later, Avro Energy hit a low of $0.47. Not great. Despite the volatility though, I think AVOE has worked its way back into my good graces.

I discussed this briefly with my chat about Juniper Group (JUNP), though I could have just as easily posted the theory regarding Avro Energy shares. With sub-$1.00 stocks, hype can swell and shrink in an instant. That's fine, but the char ebbs and flows along with the ebb and flow. I think that's what happened to AVOE a few days ago. And, the pullback was the price that had to be paid.

Now that all the kamikaze, nervous-Nellies, pumpers, and dumpers have takes care of business, everyone else can start working with AVOE - the volatility should be mostly in the past. And, with the Avro Energy shares moving higher on higher volume again, I think we can reasonably say the net tide is (still) a well-paced bearish one.

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I caught a little bit of flack (though not too much) when I posted a negative outlook for YRC Worldwide Inc. (NASDAQ:YRCW) a few days ago. Needless to say, today's 60% dip makes my glad I stood by my original forecast.

Now I'm going to change my tune a little. Though I can't say YRC Worldwide are an outright buy at today's low price, I strongly encourage to take profits if you shorted (or bought puts on) YRCW. Why? The support line around $1.50 I plotted a few days ago has come into play. It touches lows from last November, March, July, and now this month.

That said, though not necessarily a bull on YRC Worldwide, I'd have a hard time seeing it go anywhere but at least a little higher from here... at least in the short run. It may be good for a scalp trade.


And finally, Qiao Xing Mobile Communication Co., Ltd. (NYSE:QXM) has been all the rage today. I, however, would caution you against jumping onto a hot move at this stage of the game. The pullback from the high of $4.19 to $3.52 is one of the reasons why.

As I mentioned of Avro Energy, these surges in volume and price are tough to follow-through on. The do serve a purpose for stocks like Qiao Xing Mobile Communication though.... they rock them out of ruts and get the market's attention. From here I'd simply wait for QXM to find a better (i.e. more proven) footing before stepping in.

Make no mistake though - I am bullish on Qiao Xing Mobile Communication. I've plotted a weekly chart below to fully illustrate not one, but two bowl-shaped patterns we've seen form since late last year. Those nice, slow reversals bode well for QXM in the long run, particularly when we se this much volume flowing in.

A move above resistance around $4.30 could be a huge upside catalyst.

 
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