Though stocks are struggling to maintain the buying interest of investors, we've come across a couple of charts that should be able to overcome the lethargy and actually accelerate higher in the foreseeable future. We've also found one stock that's on the verge of a melt-down. Let's take a closer look at Broadpoint Securities, Inc. (NASDAQ:BPSG), FormFactor, Inc. (NASDAQ:FORM), and Valassis Communications, Inc. (NYSE:VCI).
You may recall we
suggested a bearish trade on
FormFactor, Inc. (NASDAQ:FORM) a few weeks ago. And, it paid off well. We rode a downtrend from $24.90 to $20.10 to lock in a 23% gain; some of you did even better.
I bring that up again now not to boast, but to illustrate the value of chart that can start and sustain steady trends - both up and down - like FormFactor has recently. I've got a feeling the recovery trend for FORM is going to be a mirror image of the September/October downtrend.
The 'buy' trigger for FormFactor, Inc. is actually pretty simple - the trend and its resistance line have been cleanly broken by the recent upward thrust. FORM may have enough gas in the tank to reclaim the $25 area.
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Broadpoint Securities, Inc. (NASDAQ:BPSG) is the other bullish possibility, but for a completely different reason than FormFactor.
Though it's not a perfect example, we're basically seeing what's called an outside reversal bar from Broadpoint Securities shares today. That's just a sign of a significant shift in momentum... a proverbial passing of the torch from the BPSG bears to the BPSG bulls. Part of the 'setup' for a good outside reversal is that it occurs at a low - which certainly applies in the case after the pullback from $9.00 to $6.00.
As for a target, I feel Broadpoint Securities are going to move rapidly up above $8.00, and perhaps to $9.00. After that, the pace should slow down as BPSG resumes its prior uptrend (which was still a nice trend, even if not red hot).
Valassis Communications, Inc. (NYSE:VCI) is our only bearish setup with this round of stocks, and it's not even a full-blown downtrend yet - just on the verge. It's worth pointing out though, simply because the potential pullback is huge.
In a nutshell, watch the $16.63 mark on your chart of Valassis Communications. That line was tested as support back on October 28th, but since then, VCI has worked up a head of steam for its next attack... which is occurring today. If it breaks, the stock has a ton of ground to give up as profit-takers come out of the woodwork.
The underlying pullback hints here from Valassis Communications shares are rising volume as the stock has lost ground over the last four weeks, and the rounded rollover (as opposed to a mountain-top shape) made in mid-October. One more good shove lower should pull the rug out from underneath VCI.
If you'd like to know of any changes in our opinion of BPSG, FORM, and VCI (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
