They say timing is everything. They also say that 80% of stocks are stagnant at any given time. If that's the case, then it behooves investors to focus in names that are (1) just starting a major move, and (2) actually likely to move. Electro Scientific Industries Inc. (ESIO), NVIDIA Corporation (NVDA), Netgear Inc. (NTGR), and Jamba, Inc. (JMBA) currently fit that bill; here's a closer look at their buy or sell patterns.
Netgear Inc. (
NTGR) is one of two bearish signals we're reviewing today, though we'll confess from the onset that confidence in this signal is low at best... at least for the time being. Though we've not seen the actual 'sell' before, we have seen NTGR make similar pullback patterns recently, none of which really went anywhere.
Taking a step back to look at the bigger picture reveals the reason the overall uptrend has remained intact for Netgear... there's a rising support line. It's been in place since March.
Even a pullback from current levels to the lower support line, however, is not a given; NTGR shares are up a little today. And, even if the stock did move to the lower edge of that rising trading range, it would still only be about a 2 point move.
On the flipside, a 2 point move would be a decent scalp. If that's what you're fishing for, we suggest you wait until NTGR breaks under recent support around $18.50 before taking the plunge.
By the time you read this,
Jamba, Inc. (
JMBA) may already be at new 52-week highs... the stock was headed that direction (above May's peak of $1.48) as this was being written.
Though our proprietary system can and will pick up on strong, consistent bullish trends, its real strength is on spotting situations where a stock has dies a slow death, and is being revived just a slowly....which is precisely what we're seeing from Jamba. And 'slow' is the key - it means the move and pace is sustainable.
In the short run, and on a daily chart, JMBA look overbought because it is. Investors may not care now though, as the volume has actually been increasing the more overbought Jamba shares have become. And, considering the rebound potential JMBA has, a slight dip wouldn't be a huge deal.
In any case, this is close to being the ideal setup for a long-term -
but very powerful - rally.
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Technically speaking,
Electro Scientific Industries Inc. (
ESIO) is already approved for purchase, so to speak, by the virtue of the existing buy signal. However, thee ma be one additional criteria you'll want to apply before stepping in... waiting for resistance around $13.00 to crack.
That ceiling barely even registers on our weekly chart, and it really only showed up for Electro Scientific Industries within the last couple of months. It's still something to consider though, even if only as a final precaution. (And truthfully, we'd rather pause here to lay a foundation or base for the next leg of the ESIO rally.)
As for how far a breakout may take the stock, the mid-$24 area seems to have been a turbulent area for Electro Scientific Industries shares in the past. Let's just start with that as a target.
NVIDIA Corporation (
NVDA) is our other short/bearish idea, and unlike Netgear, our confidence is pretty high in this signal. It doesn't hurt that NVDA is actually in the red today, and has already traded under yesterday's low.
This chart is a classic case of running too far, too fast. NVIDIA simply wound up in an overbought situation after a major rally between July and now, and shares are being reeled in now that the euphoria is wearing off.
As for possible targets, there are several. The mid-$12 area as well as the $10.00 level have been support and resistance in the stock's recent past. NVIDIA shares have also found support at a rising support lone that extends back to December; it's currently at $11.00. So, though we view an NVDA exit as a 'play it by ear' situation, we also expect such an exit to some somewhere between the $10 and $12.50 range.
If you'd like to know of any changes in our opinion of ESIO, NVDA, JMBA, or NTGR (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.
