Aug 27, 2010 10:04 AM PDT
We really, really hope your were reading our site's commentary at least by September 15th. If you were, you at least were aware that Sunrise Senior Living, Inc. (NYSE:SRZ) could make the triple-digit rally it has since then.
At the time, SRZ was hovering around $2.60 area, on the way up, but headed into a know resistance line at $3.05. Given the entire scenario, we felt the risk/reward ratio favored being on more than it favored being out. As it turns out, Sunrise Senior Living had very little problem with the ceiling at $3.05, and blasted right through it to a new 52-week high if $5.59 today.
Too late to get into Sunrise Senior Living shares? Normally we'd say so, but in this case we believe there's a lot more upside to go. Our only advice is just to wait for SRZ to pullback a little. Don't wait too long though - the dips have been shallow and short-lived. Our target remains at $8.41.
Sorry for the zoomed-out chart that blurs some of the detail for Novadel Pharma Inc. (AMEX:NVD). We wanted to show you as much time as possible to set the context for what will be a he breakout move.... if it materializes.
NVD was put on our radar today not because of a strong move (obviously), but because it seems the whole investments community is buzzing about the Novadel Pharma. What's the buzz? That's the point - nobody can really say why this pharmaceutical company has become so electrifying over the last 24 hours. In cases like this though, there's usually something big around the corner.
As for how/if to trade it, Novadel Pharma is contending with two resistance lines. One's at $0.26 where shares have been hitting a headwind for the last four weeks, and the other's at $0.31, which has been an absolute cap for the same time frame. (There's a third one around $0.40.). If NVD can build on the buzz and blast through that resistance, the hype could be loud enough for a good trade. As each resistance line is knocked out of the way, the next one will be easier to topple.
Just to be clear, this isn't a matter of the stock's 'value'.... strictly momentum.
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While most owners of Plains All American Pipeline, L.P. (NYSE:PAA) are likely to be aware of how well their shares have done lately, they may not realize just how well they're positioning themselves to do in the foreseeable future. The stock has broken above a key resistance line for the second time since July, and appears to be gaining momentum.
The big ceiling for Plains All American Pipeline shares was $48.40, where the stock not only had trouble during Q3, but also during Q3 of last year. PAA has managed to fight its way back above that mark (again) last week though, and is moving even higher today. Though volume was a tad light last week, it's at least been persistent.
As for an upside target, it's a longer-term view with Plains All American Pipeline, but we don't think a revisit to the $65 area is out of the question.... perhaps more. The momentum we're seeing from PAA is just strong, yet sustainable (the missing ingredient, all too often).
And finally, for anybody who was planning on using today's dip from Royale Energy, Inc. (NASDAQ:ROYL) as a chance to step into the breakout move started last week, we suggest you think again. Odds are good that last week's pop was a fluke. If history holds up, ROYL will be back to the $2.00 soon enough.
The daily chart below says it all... Royale Energy shares have had a major problem with resistance around $3.70, having been unable to cross it and stay above it for more than one day at a time. We've seen ROYL fall back under that line four times now since this time last year.
Yes, there is a difference this time with Royale Energy - the accumulation was very heavy last week, which it has never been with prior surges. Given that's the only thing ROYL has going for it though, we'll suggest there's more downside than upside waiting for the stock as it returns to the lower edge of its trading range.
If you'd like to know of any changes in our opinion of NVD, ROYL, SRZ, or PAA (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
