Technical Review of SRZ, TBL, EOG, FORM

Though the broad market is extending its September romp, some stocks are following suit while others are not. In fact, it seems as if about half of them are not. All of them present trading opportunities though, such as FormFactor Inc. (FORM), EOG Resources, Inc. (EOG), Timberland Co. (TBL), and Sunrise Senior Living Inc. (SRZ). Here's a better look at each one.

After watching Sunrise Senior Living Inc. (SRZ) shares accelerate on higher volume over the last five days - on rising volume no less - the question becomes more about 'when' rather than 'if'... when is SRZ going to really blast off?

Odds are that it will depend on resistance at $3.05. That's where Sunrise Senior Living hit a ceiling twice earlier in the year. If that hurdle can be crossed, look out above.

As for a target, the only ones that have any meaning for SRZ are the Fibonacci lines. Let's start with the near ones, the first of which is at $8.41.


Timberland Co. (TBL) is only for your watchlist right now, but with only a modest amount of deterioration could turn bearish fast.

The line in the sand is support at $12.29, though Timberland shares fell a hair lower in May and July. Either way, the $12.29 'zone' is a major line not just because it's been support since May, but it was also resistance for TBL between December and February. If it breaks, the stock could make its way back to the lower end of the December/February range at $10.00.

There's also the possibility that Timberland could crack above its falling support line, though that move wouldn't be the high-odds trade here.


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The downside potential for FormFactor Inc. (FORM) is pretty straight-forward... the stock's slowed down at the upper edge of a bullish trading range, and is toying with the idea of a tumble. If it does crack (and we think it will), FORM could make its way all the way back to the lower edge of the zone around $20.00 by the time support is found again.

Safety-oriented traders may want to wait for Monday's low of $25.17 to be surpassed - bearishly - on a closing basis before taking the plunge. Given the fact that FORM as well as the market is overbought though, it may be an unnecessary precaution.

The move from $25 to $20 would be a 20% ride... not bad. But, equity options are available on FormFactor shares, to add some leverage to the move.


And finally, EOG Resources, Inc. (EOG) should go on your bullish watchlist, as it may be in the midst of a breakout. The upper $79 area has been a ceiling for EOG since May, but today's high of $79.91 could be striking another blow against that resistance.

Truthfully, it's not the ideal breakout move... the stock's a little overextended as it is, having pushed off that rising support line more than a week ago. It would be healthier had EOG pushed off support today - the same day as the attack on the resistance line.

However, the need for a more-recent pushoff may be negated by an even bigger bullish pattern... EOG Resources shares appear to be on the verge of completing an upside-down head and shoulders pattern. The neckline is - you guessed it - the upper $79 area.

It's tempting to wait for EOG to pull back before stepping in at this point. That dip may never materialize though. Your call. Either way, it's a good looking setup.


If you'd like to know of any changes in our opinion of EOG, FORM, SRZ, or TBL (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.