Penny Stock Analysis

Technical Review of MGI, HOV, and HLCS

Charts Hovnanian Enterprises, MoneyGram International, and Helicos BioSciences are reviewed.

Published: Wednesday, November 11, 2009 @ 11:02 AM PST
Rating N/A
Stocks are so far on pace for another bullish day, though most of the more interesting chart setups we've come across have been of the bearish variety. Perhaps they could be used as a hedge, should things turn south quickly. In any case, charts of Hovnanian Enterprises, Inc. (NYSE:HOV), Helicos BioSciences Corp. (NASDAQ:HLCS), and MoneyGram International, Inc. (NYSE:MGI) are worth a closer inspection today.

I thought Helicos BioSciences Corp. (NASDAQ:HLCS) might have a shot at finding support at $1.60, as it did last week. The pressure was too great though, pushing the stock under a key floor.

That level wasn't pulled out of thin air for Helicos BioSciences shares. It's the 61.8% Fibonacci retracement level for the entire July/August rally. Now that it's snapped with today's low of $1.41, HLCS is free to move back to July's lows around $0.40.

You can't quite make it out yet, but the downtrend from Helicos BioSciences is gathering volume. The last two days have been heavier-than-average distribution days. That doesn't help.



----------------------------------------------------------------------
Sign-up for Free to Receive Future Commentary
and Trading Alerts on HLCS, MGI, and HOV.

----------------------------------------------------------------------

Just to be clear, though I know the residential housing construction market is picking up, I still see way too much capacity. The rest of the market obviously doesn't agree, which is why stocks like Hovnanian Enterprises, Inc. (NYSE:HOV) have been doing well of late.

Nevertheless, a trend is a trend, and as it stands right now, like Hovnanian Enterprises shares are doing their best to sustain a bullish trend that's been in place since February. I believe the next leg of that trend is predicated on HOV breaking above a recent resistance line that, with the help of a rising support line, has formed a wedge shape... a shape that could squeeze the daylights out of the chart and catapult Hovnanian upward.

Like I said, this has nothing to do with valuation - I think Hovnanian Enterprises is overvalued as it is. This is about a swing trade; HOV is simply setting up what could be a good short-tern move, as long as resistance at $4.46 can be cracked.



And finally, MoneyGram International, Inc. (NYSE:MGI) is on the verge of serious trouble..... the price a stock pays for getting overextended over the span of several months.

The pullback from $3.44 to $2.61 could just be the beginning for MoneyGram International. I suspect part of the reason the bleeding stopped this week was simply because MGI was approaching 38.2% retracement level at $2.43. The stock's hardly bounded off that floor though. In fact, the MoneyGram is pointed that direction again today, less than 20 cents above it.

If $2.43 breaks as support, the next big support level for MoneyGram International shares is $1.81. First things first though... $2.43 is still in the game.



If you'd like to know of any changes in our opinion of HOV, HLCS, or MGI (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
Rate It : 1 2 3 4 5

 
Post A Comment
 
 
 
 
Search SCN
Bookmark and Share

Get the SCN
Newsletter Today!

Find out WHAT's Hot and What's Not from Top Traders and Investors.

Gain Insight into Which Small Cap Growth Stocks Have the Potential for Monster Returns.

Identify Market Trends and Changes Before the Rest of the Crowd.

Whitelist Us

Having Trouble Getting Our Email Newsletter?  Whitelist Us.

Click here for more info...

Fri, Mar 19, 2010 @ 10:39 AM PDT
Despite the fact that the market's pullback today is likely to bleed into next week (and perhaps longer, give the size of the recent runup), a handful of small caps - largely unknown to investors - are...
Rating N/A
Fri, Mar 12, 2010 @ 10:53 AM PST
Considering about half of a stock's individual performance relies on sector and industry influence rather than the company's merits, it makes sense to stay abreast of industry trends. With that in mind...
Rating N/A
Fri, Mar 05, 2010 @ 10:25 AM PST
Are there any sectors or industries of any market cap that have simply been overlooked by the bulls and the media over the last twelve months? Sure, and they're very undervalued as a result. We'll take...
Rating 5
Fri, Feb 26, 2010 @ 12:29 PM PST
It was a busy week on the economic announcement front. Lots of housing and real estate data, in particular, was spewed forth from the media machine without putting it all in its proper perspective. I want...
Rating N/A
Fri, Feb 19, 2010 @ 11:30 AM PST
Before anyone gets hysterical about looming interest rate increases, take a breath, and keep reading. While the news writers made something more than it as (as usual) in the case of yesterday's increase...
Rating N/A
SmallCap Network Newsletters

This community is currently in beta and is constantly undergoing active development.  Please be patient as we strive to bring you a usable, full-featured community that you will enjoy.  If you should have any questions, problems, suggestions, feature requests, rants, and/or raves, please do not hesitate to let us know by writing us as : webmaster@smallcapnetwork.com.