What a Difference a Month Makes: TELK, CNAM, PRMW in Focus

Jan 11, 2013 1:24:12 PM PST | 617 View(s) | No Comment(s) - Post a Comment Rating

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StockHQ:

CNAM
$0.32 -$0.01 -1.64%
PRMW
$1.58 +$0.02 +1.28%
TELK
$1.30 -$0.02 -1.52%

Exactly one month and one day ago, I penned some bullish comments on Telik, Inc. (NASDAQ:TELK), China Armco Metals, Inc. (AMEX:CNAM), and Primo Water Corporation (NASDAQ:PRMW). Though the reception of those opportunities was uneventful (i.e. nobody really cared), in all three cases a follow-up is merited. Why? Because - ta-da - two of the three ended up taking off and are still in bullish mode, while the third is on the verge.

On the nearby daily chart of Primo Water Corporation we're seeing good support and strength, especially from the 20-day moving average. When you take a step back though, the bullishness firms up even more. Though PRMW seemed to be pushing its luck after the big bullish gap from November, the bulls did a great job of regrouping and rekindling. Now, the rally is building again, with the late December dip to the 50-day moving average line bleeding off the last of any lingering overbought-ness.

It's the weekly chart of PRMW, though, that really puts the daily chart's recovery effort in the proper perspective. The last five weeks have been the most bullish five weeks we've seen in well over a year. While the weekly chart's 200-day moving average line (a 40-week moving average) is still acting as a ceiling, we're seeing a tidal shift in the undertow for Primo Water Corporation. It just needs to hurdle that 200-day line.

Telik, Inc. was flying through the roof back on the 10th, much like it is today (that's why I pointed it out then). But, the move wasn't built to last. TELK pulled back just a few days later, and odds are most of the market chalked it up as a one-day wonder, and lost interest in it.

Now that we've seen that kind of huge strength for a second time though, maybe TELK isn't something to dismiss. It's actually pretty common for small cap stocks.... it takes a couple of bullish swings to really get things going. In fact, I'd be hesitant to say this one's "going" at all. But, the market has spoken here, and the interest is in place. Though not as stable as one would absolutely hope, this second wave is convincing enough.

Finally, on December 10th we had already observed China Armco Metals, Inc. starting to find support at the 20-day and 50-day moving averages. The problem at the time was that CNAM had also hit a ceiling at the 200-day moving average line. Nevertheless, the buying volume was really starting to flow, and the upside looked good.

Now it looks great. Since then - and as the nearby chart shows - the stock's made its way above the 200-day average line, and is now finding support there. Better still, the 20-day moving average line has caught up with the surge from mid-December and is now also playing a support role. The rally is hardly over though. As you can see from Friday's bar, China Armco Metals shares are once again pushing up and off support levels and testing new highs. If you really want some perspective though, take a look at the rebound effort in the weekly timeframe.

Bryan Murphy is a paid contributor of the SmallCap Network. Bryan Murphy's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.