Aug 27, 2010 10:04 AM PDT
If it seems like I'm posting an update China MediaExpress Holdings Inc (NASDAQ:CCME) every day, you're not crazy - I am. It's just that this small cap stocks seems to dig its hole a little deeper every day, and I want to capture - from an academic perspective - the moves from bad to worse. Besides, we're now in the brink of a total meltdown, so there may be little need to keep looking at this chart much longer.
As a mentioned a several days ago, a handful of 'death crosses' (bearish crosses of moving averages) unfolded in mid-June, and since then, China MediaExpress Holdings shares have fallen under a combination of important support lines....the 200 day line (green) included. Like I mentioned a few days ago, if the remaining floor at $10.58 (red) breaks down too, there's nothing else to catch CCME (currently at $10.83).
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Sorry for the mess of a chart below. Unfortunately, it was a necessary evil to really explain what was going on with Gushan Environmental Energy Limited (NYSE:GU). In simplest terms, this small cap has broken above a long-term falling resistance line (red), is knocking on the door of a short-term resistance line (blue), and has a horizontal support/resistance line )gold) in sight.
At the same time, GU shares have moved above their 50-day average (black), are close to the 100-day line (purple), and gunning for the 200-day line (green).
What's so interesting - and bullish - is how each of the straight-line milestones are aligned with key moving averages. Each small step higher is actually a huge step towards a breakout, and if Gushan Environmental Energy Limited can hurdle the $1.22 area (the last of resistance), I see fireworks. Put it on your watchlist.
And finally, I don't know what's more stunning with Immunomedics, Inc. (NASDAQ:IMMU) ... the fact that it's been range-bound between $3.10 and $3.92 (framed in blue) for so long, or the fact that this small cap is no closer to a breakout now than it has been for the last seven months.
Oh, I know IMMU is close to moving above the key falling resistance line (orange) currently at $3.64. It just doesn't matter, now that it's back in the sideways trading zone. Factor in how the 200-day line (green) - which was proven as a resistance line back in May - is also now inside the trading range, and it's hard to get excited about today's strength. In fact, I wouldn't. Until Immunomedics actually clears $3.92, there's really nothing worth trading here.
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