I know we haven’t heard much in the way of news in the last few days from small cap company Applied DNA (APDN). However, the way the chart is perking up, I have to wonder if we will in the near future. (Stock charts are usually more predictive than reactive.) If my gut is telling my head the right thing - and by applying a little technical analysis - I suspect APDN shares could become a hot small cap stock real soon.

First of all, this is more lesson-oriented than bullish opinion. Even if Applied DNA doesn’t break out (and up), you may want to put this observation in your mental filing cabinet. That said…

There are two things I really like here, and a third thing I could like soon - conditionally.

1. The buying volume is starting to grow. Tuesday’s 370,000 shares is the biggest accumulation day we’ve seen in a while, and we’re starting to see quite a few of them. With the exception of January 23rd, distribution (selling) days are very mild.
2. APDN is above all of its moving averages…again. I know this is a painfully simple tool, but it’s also something that can’t be misinterpreted. If you like momentum, moving averages tell you everything you need to know. (If you’re a bottom fisher, they tell you nothing.)
3. The aspect I almost like? APDN is on the verge of new multi-week highs. Technically that level is 17 cents, though 16 cents is significant too. A move to 18 cents I would consider a victory, but also a great breakout move. Yes, that means trade-worthy - at least in my opinion.

Of course, I also have the advantage of knowing what’s going on off the charts. If you feel like the good news has been pouring freely from Applied DNA lately, it’s because it has…much more so than the latter part of last year.

An improving small cap chart supported by the underlying company’s real progress? Can it really be that simple? (Yes, it can. The fundamentals tell you ‘which’, while the charts tell you ‘when’.)

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