Technical Outlook: CPD, RGN, RVEP, BEST

The market's taking a beating for the fifth day out of the last six, and it may just be the beginning of the usual early-October pullback. The only way to overcome the bigger-cpuitre selloff is to short the stocks leading the charge lower, or step into the ones bucking the overall downtrend. Shiner International, Inc. (BEST), Rio Vista Energy Partners LP (RVEP), Regenerx Biopharmaceuticals Inc. (RGN), and Caraco Pharmaceutical Laboratories Ltd. (CPD) look like your best bet to do just that. Here's a detailed look.

If it were just today's 25% tumble from Regenerx Biopharmaceuticals Inc. (RGN) that we had to consider, we may not even mention. That's not the only red flag though.

Take a look at yesterday's bar for Regenerx Biopharmaceuticals shares.... a wild move from $0.82 to a peak of $1.95, and ten a pullback to close at $1.12. There was zero follow-through; RGN is well under where it stated the day.

Based on the shape of the bars over the last two days, we have to assume Regenerx was a one-day wonder, and en route to support back at the $0.51 mark. There was just not enough buying interest when RGN short past $0.65.

Speaking of the shape of daily bars, Shiner International, Inc. (BEST) made a key reversal pattern (to the upside) yesterday. It wasn't the more-common outside reversal bar though. It had elements of an outside day, but also mirrored - partially - what's called a harami. 

The name doesn't matter either way though. What matters is how the market had a sudden and drastic change of opinion about Shiner International shares, and we're seeing strong follow-through today.

The icing on the BEST cake is that yesterday's reversal broke through a key resistance line, and today's strength has carried the stock even further above that mark. Shiner International is still contending with resistance around $1.90 though, so don't get too presumptuous.

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Caraco Pharmaceutical Laboratories Ltd. (CPD) is oh-so-close to a breakout that it hurts. Unfortunately, today's strong 23% move has not clinched the deal. If anything, today's jump jeopardized the stock's odds of breaking past the ceiling around $5.20.

Take a look back through March. Caraco Pharmaceutical shares haven't been above that line - despite four attempts now - since then. Today's high volume move towards  that mark is the best effort we've seen in a while, but CPD left a gap behind that may need to be filled first. That pullback, however, may also be the reason potential buyers decide to steer clear.


Caraco Pharmaceutical Laboratories is definitely worth putting on your watchlist, but buying it's a little too risky until it's clear CPD has established a base above $5.20.

Finally, Rio Vista Energy Partners LP (RVEP) looks like it's at the beginning of a breakdown. The support line we've seen take shape over the last three weeks cracked today. Granted, RVEP is back above it as of now, but the damage has been done.

Besides, the sellers haven't been shy about dumping Rio Vista Energy Partners at opportune times - the selling volume has been stronger while RVEP was around $1.00 than the buying volume was on the way up there.

Let's just assume Rio Vista Energy shares are headed back to the support area around $0.40.

If you'd like to know of any changes in our opinion of BEST, CPD, RGN, or RVEP (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.