Sep 10, 2010 8:47 AM PDT
I actually went bullish on Smith & Wesson Holding Corporation (NASDAQ:SWHC) back on March 3rd, for technical as well as fundamental reasons. Since then, the fundamentals haven't changed, but the technicals changes for SWHC since then have me and a few other trades salivating.
There are basically two things going on here for Smith & Wesson shares. The first one is the wedge shape (framed in blue), which this small cap stock already broke free of - bullishly - three weeks ago. The other big event may be right around the corner... a move above the 200-day moving average line (green). If we get that as well, this gunmaker is a screaming 'buy'.
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Back on May 3rd, after CombinatoRx, Incorporated (NASDAQ:CRXX) had popped above a resistance line at $1.51 a little too bullishly for its own good, I specifically made the point that potential new buyers would want to wait to see if CRXX could actually establish a base above $1.51 before diving in. Well, good news.... this small cap has indeed used that former resistance line at $1.51 as a support line; it's safe to wade into the waters.
And on a side note, CombinatoRx shares are particularly well-positioned for a move, having gone through a consolidation phase between February and April. All of its key moving averages converged in late March, which will ultimately set up a big divergence.... periods of low volatility are followed by periods of high volatility, and vise versa. 
And finally, if you were in U.S. Gold Corporation (NYSE:UXG), now may be a great time to get out..... while the gettin's good. Though gold (the commodity) as right at all-time highs, the reality is, that strong move leaves it vulnerable to a fast and unexpected pullback. UXG will be along for the ride if it happens. Better to be out early than out late, especially after today's big downside reversal effort - a red flag.
And if the name U.S. Gold Corporation rings a bell, it may be because we issued a trading alert on it back on July 10th, when it was trading at $2.49. An exit at today's price of $4.04 would mean a net gain of 62% for those who could stomach the wild ride.
If you'd like to receive further updates and any changes in our opinions UXG, CRXX, and SWHC, be sure to sign-up for the SCN Newsletter today! It's FREE.
