With a mixed earnings season so far, and a slightly lower unemployment figure to digest, the market's shaking
as well as stirring some stock charts. The most noteworthy -
and perhaps most trade worthy - right now are those of AT&T, Inc. (T), Skystar Bio Pharmaceutical Company (SKBI), Cardinal Health, Inc. (CAH), and Purespectrum, Inc. (PSPM.PK). Here's a quick technical review of each, which may help determine where each one is headed next.
There's a modest chance that
AT&T, Inc. (
T) shares were caught up in the recent decimation of wireless stocks. Most likely though, the stock's recent dip was on its own merits; the company posted flat sales last quarter, yet posted a 15.2% dip in revenue.
The net result of the telecom giant's disappointing numbers was confirmation of a major ceiling around $26.80. AT&T shares have tested -
but failed to cross above - that mark despite four attempts since March. Needless to say, that should be the key to any further upside.
Though technically range-bound between $21.60 and $26.80, don't count on shares of T falling all the way back to the lower end of the sideways trading zone.
Take everything said about
Skystar Bio Pharmaceutical Company (
SKBI) with a grain of salt. The stock has such a limited trading history that it's a little more difficult than normal to get a read on its chart.
That said, the honeymoon seems to be over for the vaccine maker, which rang the opening bell of the NASDAQ exchange just a few weeks ago. Though SKBI is hardly falling apart, the interest in the stock is clearly fading... shares fell under a key support level (short as it may be) on Friday.
Part of the problem may be a lack of news.... the company hasn't made a peep since the NASDAQ opening bell event. (Investors get bored easily.)
If the 20 day moving average line at $14.64 fails as support, look out below.
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Though
Cardinal Health, Inc. (
CAH) shares had a very good July, and topped it off with news of an acquisition of a nuclear pharmacy group and a $500 million stock buyback, it's old news to investors. Even with a new CEO, George Barrett, starting at the end of the month, it's not enough.
See, as Julys' rally faded and August came, the rally stopped - CAH started to move sideways.
Perhaps traders are all too aware that a major technical hurdle lies ahead on the chart. A steeply-falling resistance line that's been in place since early in the year may halt this upward movement in its tracks. For that reason, investors are ill-advised to jump in now. If the ceiling breaks, then Cardinal Health's uptrend has much better odds.
The only pink sheet of the four under the microscope today,
Purespectrum, Inc. (
PSPM) made good on the pullback we called for back on June 9th, when the stock was trading at 57 cents.
The red flag was the fact that PSPM shares were falling despite good news form the company.... the acquisition of International Medical Staffing, and the contract with Arcata Electronic. The trade-trigger, however, was a slide under the chart's support at 55 cents. (continued below)
As it turns out, Purespectrum shares broke that support a few days later and proceeded to tumble to a low of 31 cents... March's key support lines. We advocated taking some short trade profits then.
And, we're advocating taking any
remaining short trade profits now. PSPM rebounded for a while, but fell back to the high 20 cents area just a few days ago. The stock's started to perk up again here, telling us that
the 25/30 cent zone is where the bulls have drawn a line in the sand. If you'd like to know of any changes in our opinion of these four picks (or if we officially recommend them as trades), be sure to sign up for free newsletter today. It's delivered 2 to 3 times per week.
