While the broad market's starting to peel back from recent gains, some charts are setting up major moves... though not all bearish. Bruker Corporation (BRKR), Leading Brands Inc. (LBIX), National Coal Corp. (NCOC), and Macquarie Infrastructure Company LLC (MIC) are the next best trading bets. Take a look.
We mentioned
Leading Brands Inc. (
LBIX) was on the verge of a breakout
back on the 14th. Yesterday, it did indeed make good on that breakout potential. Unfortunately, it's not as attractive as we thought it would have been at the time.
Yes, LBIX broke past the ceiling at $0.67 - that's the good part. The bad news is, it gapped past the ceiling in a move that may be a little too hot for its own good. Ideally, Leading Brands will go back and close the gap before continuing higher. We'll see.
The only exception might be if Leading Brands makes two or three higher highs and higher closes from today forward, which will tell us the market's not worried about the gap. It's plausible - a tiny gap around $0.69 is overshadowed by the massive recovery potential here (to $4.00 or more).
Although slightly in the black today, the damage may have already been done for
Bruker Corporation (
BRKR). Not only has a bullish support line been broken, but so too has a horizontal trading range between $9.76 and $10.87. The stock's currently at $9.49, but hit $9.17 today.
We're not looking for a beeline move lower from BRKR now. Though Wednesday's and Thursday's heavy selling volume are a major bearish red flag, it's uncommon for selling that strong to not get a little bit of sympathy buying; that's what we may be seeing today with Bruker Corporation.
The key will be how strong the recovery effort ends up being today (or perhaps next week), and how much volume is behind it. Obviously we doubt it will be strong enough to push BRKR back into its range; we expect this chart to keep falling now that all those support lines have snapped.
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Macquarie Infrastructure Company LLC (
MIC) is already in the midst of a breakout - it has been for a few weeks, in fact. Nevertheless, we still see the majority of its upside potential (a recovery move) ahead of it rather than behind it.
The only concern we have at this point is the current stall at a ceiling around $9.50. Undoubtedly at least a few recent buyers are thinking about taking some profits after the bug run up from Macquarie Infrastructure shares; this hesitation may be an omen of that being around the corner.
So, the next step is simple... if MIC breaks above $9.50, we'll have to assume the breakout has been renewed. The stock was above $30.00 just a few months ago, and could find that price again without a significant amount of effort. Wait for $9.50 though.
Finally,
National Coal Corp. (
NCOC) looks like it could be a buy, not so much because of persistent momentum (since we've not seen it), but rather, the persistent shape of the day to day bars.
First, though not foremost, notice how two of the most recent high-volume days were major accumulation days with stunningly strong moves from National Coal shares. Even the second-highest volume day from NCOC of the three - which was bearish - was barely a loss. Point being, the ebb and flow on a net basis is favoring the bulls.
Second, notice how over the last three weeks, most (though not absolutely all) of the closing prices for National Coal Corp. have been towards the upper side of the daily trading range. It's a subtle hint that when push comes to shove, investors would rather own NCOC overnight than not own it. The higher lows speak for themselves.
This one will undoubtedly remain volatile, so prepare for plenty of wild swings. It's getting traction though.
If you'd like to know of any changes in our opinion of LBIX, MIC, NCOC, and BRKR (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.
