Technical Review of KERX, PGH, and WTM

Stocks are modestly higher today, but yesterday's luster has clearly worn off. That doesn't mean we're not seeing a few opportunities pop up though. Keryx Biopharmaceuticals (NASDAQ:KERX), White Mountains Insurance Group, Ltd. (NYSE:WTM), and Pengrowth Energy Trust (USA) (NYSE:PGH) are all worth a closer look, so let's do just that.

I have to be honest..... I'm not quite sure what to make of White Mountains Insurance Group, Ltd. (NYSE:WTM). It's taken the market by storm over the last 24 hours mostly thanks to an updated valuation (for the better), but I'm not sure that alone is going to be enough to matter in terms of the stock's price.

Here's how I'd play it - wait for White Mountains Insurance Group shares to crack the ceiling around $328.16. Between that horizontal resistance and a rising support line, the wedge WTM has been working on should break soon. So, the wait shouldn't be that long.

As for a target, the 'new' valuation pegs White Mountains Insurance Group shares at more than $400, though I think if the near-term ceiling can be broken, WTM has a shot at re-reaching the $450-ish area... the middle of the zone where it found turbulence in the middle of 2008.


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I didn't even know they made stocks like Pengrowth Energy Trust (USA) (NYSE:PGH) anymore. I do know that I'm glad I stumbled across it when I was looking for some information on something else.

Check this out.... Pengrowth Energy Trust shares boast a forward-looking P/E (2010) of 16.6, a dividend yield of 7.9%, and an earnings 'beat' in three of the last five quarters. Those aren't stunningly impressive numbers, but solid. More importantly, it suggests PGH shares actually have the underlying support needed to move higher.

That's not even the reason I'm interested in Pengrowth Energy Trust. Check out the chart; PGH just bounced off a major support line as part of a bigger-picture uptrend. This may be one worthy stepping into as a longer-term play, if only to add a bit of safety to other holdings.


I've got a little good news and a little bad news for anyone who happens to own Keryx Biopharmaceuticals (NASDAQ:KERX)..... Actually, I've mostly just got bad news.

The good/positive them here is that Keryx Biopharmaceuticals has been moving higher, guided by a rising support line that extends back to May. The bad news is, there's been no consistent volume to actually support than trend. Translation? KERX is just setting up a major pullback.

You can see it pretty clearly on the chart... we've only seen about four accumulation days for KERX since the rally began. My concern has been heightened over the last two weeks, as Keryx Biopharmaceuticals have actually moved a little higher off that support line, but with no volume whatsoever. We're on borrowed time here - watch for the first break under that key support line.


If you'd like to know of any changes in our opinion of PGH, WTM, and KERX (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.