Technical Outlooks for CAMP, KATX, and HBAN

The market managed to fight its way back into the black on Thursday, though for how long it can stay there is anybody's guess. It may be best to keep taking trades on a case-by-cases basis, given that many names have been able to beat their own drum rather than march to the market's. With that in mind, here are some thoughts on small cap names KAT Exploration, Inc. (OTC:KATX), Huntington Bancshares Incorporated (NASDAQ:HBAN), and CalAmp Corp. (NASDAQ:CAMP)  

I actually went bearish on CalAmp Corp. (NASDAQ:CAMP) back on February 4th, but with a footnote at the time. Since then, the footnote/expectation has played out, and did not change the fact that CAMP is in trouble. So just consider this a reiteration of that bearish view.

In short, CAMP is back under the support line at $2.85. The bulls took the shot at a rebound that I figured they'd take in my prior comments. While it was a noble effort, it wasn't enough to undo the damage that had been inflicted on CalAmp Corp. The only thing the temporary boost did was give the short-sellers a slightly better price to step into a trade.

In the meantime, CalAmp shares verified that the 100-day moving average (black) line is resistance, and the 50-day line (gray) moved under that 100-day average. We've seen CAMP shares make lower lows and lower highs since then. It is what it is.

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I suppose I can't complain too much about the move Huntington Bancshares Incorporated (NASDAQ:HBAN) made over the last three days. After all, it did take the stock past a key barrier that was stifling its overall potential. On the flipside, I don't really care for the way HBAN made this progress.

If Huntington Bancshares rings a bell, it's probably because I posted some conditionally-bullish thoughts on the stock back on January 27th. I drew a line in the sand at $4.77/$5.00 then, having observed how HBAN started to struggle around that range. Sure enough, the rally that carried the stock precisely there in January did NOT continue to push the stock higher.

This week, however - after a better running start - HBAN finally punched through that ceiling, hitting a high of $5.62 today. While I fully expect a brief pullback here in the shadow of a strong surge, I don't fear it. The MO is simply to wait for that dip and then step in; life should be much easier for Huntington Bancshares now that the resistance zone has been snapped.

I have little doubt my comments on KAT Exploration, Inc. (OTC:KATX) are going to stir up a hornet's nest.... again. Seems like every time I mention KATX in the same paragraph as 'technical analysis' - particularly from those who aren't on the same side of the table as my analysis - it creates a firestorm. Sorry, but I have to call them like I see them to the best of my ability. With that in mind....

While I've been bullish on KATX for the better part of the past three months, over the past three days I've had to acknowledge that the stock is under fire, and close to a technical breakdown. The line in the sand for KAT Exploration is $0.05. That's where you'll find horizontal support for the stock over the last two months, and more recently, it's about where you'll find the support of the 50-day moving average.

None of this is to say we're on the verge of an impending breakdown. So far, KAT Exploration, Inc. has found a floor at both of those important lines, which may be an omen of a huge bounce - we just don't know. My only aim is to point out how close KATX is to falling off a cliff, from a technical perspective (since a little bit of technical damage has a way of becoming a lot of technical damage pretty quickly). Yes we saw a strong gain late in the day here on Thursday, but the volume was pathetic all day long - that pop at the close was not the majority opinion. The chart's below.

Now, on something of a side note for all the would-be critics of reading the chart of a small, bulletin board name like KATX...

Your argument that technical analysis doesn't apply to a stock like this isn't entirely off-base. The price is ridiculously low to the point of being exceedingly volatile, and the float is also tiny to the point of the stock being easily pushed around - both are legitimate points.

However, I've found (and not just me) that the dividing line between should/shouldn't use technical analysis has less to do with price and float, and much more to do with volume..... of which KAT Exploration, Inc. has plenty. That's not to say it's fault free, but TA can and does have merit for stocks of all sizes, WHEN INTERPRETED APPROPRIATELY. All analysis should be taken with a grain of salt, and that includes technical as well as fundamental analysis. That doesn't mean it has no bearing, however.

The fact is, you can't 'invest' in fundamentals - despite what the Motley Fool says. You can only 'invest' in stocks, which may or may not reflect the underlying company's performance. For every rising stock with impressive underlying earnings, I can show you a falling stock with just as impressive earnings and potential.

That's the power of charts; they may not tell you the fundamentals, but they tell you something much more important.... the market's current opinion of the company's fundamentals. Since market opinion is the ultimate determinant of a stock's price, using technical reads on a chart that moves pretty liquidly has strong merits. It's not the only thing that matters, but it is a legitimate piece of the puzzle. I focus on charts quite a bit here mostly because nobody else is willing to offer this kind of analysis.

Just some food for thought.

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