Aug 27, 2010 10:04 AM PDT
To be honest, I can't exactly put my finger on why I'm really starting to dig Trico Marine Services Inc (NASDAQ:TRMA). Today's 28% pop doesn't hurt, but honestly, moves of that size usually steer me clear rather than draw me on. In the case of TRMA though, I think the 28% rally is actually a sign of something bigger that's brewing.
I have to concede that a great deal of my bullishness stems from the four weeks of consolidation we saw for this small cap following a high-volume "blowout' move to new lows five weeks ago.... sort of a stock-specific capitulation. Volume faded for a while, and now it's flowing as Trico Marine Services shares make their way higher again.
Whatever the case, I just see TRMA as a speculative buy at this point. Or who knows? Maybe we'll see a fake-out like the one from April. Don't get married to it, as the company won't see profits anytime soon. 
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A few days ago I made a point of mentioning that YM BioSciences Inc. (USA) (AMEX:YMI) really hadn't participated in the marketwide pullback. Oh, it struggled, but didn't give up anywhere near the ground that most stocks did. In fact, the horizontal support around $1.10 (orange) stopped the pullback cold.
Well, today we're seeing the benefit of a small cap stock being able to 'stay in the hunt', Thanks to YMI holding the line at $1.10, it easily resumed the ebb/flow pattern within a converging wedge shape (framed in blue). And yes, as has been the case the last couple of times, I expect YM BioSciences shares to make their way all the way back to the upper side of the triangle, currently at $1.65.... if the 200-day average (green) at $1.34 can just be cleared.
Is the recent rebound from Delcath Systems, Inc. (NASDAQ:DCTH) the real deal? I believe it is, and as such, I do think it's trade-worthy. To be clear though, I still don't see this small cap stock as a long-term holding. This is strictly a trade intended to capitalize on the move out of on oversold situation.
The key trigger for the new short-term 'buy' rating is today's simultaneous move above the 20-day (blue) as well as the 200-day (green) moving average line. The volume on the upswing, however, has also been considerably stronger than the volume we saw for Delcath Systems during the last part of the pullback. The pile-on is beginning.
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