Though the overall market is just now starting to feel the weight of recent gains, some stocks are just now starting to perk up. Digital Angel Corporation (DIGA), Ameron International Corporation (AMN), TerreStar Corporation (TSTR), and AEterna Zentaris Inc. (AEZS) are among the most interesting though. Here's a more detailed look at each chart.
Ameron International Corporation (AMN) is a classic case of a stock getting a little bit (ok, a lot) ahead of itself, and then paying the price for it. In this case, the 'price; is likely to be a wave of profit-taking that sends AMN all the way back to the lower edge of a bullish trading range.
Had Ameron International not blasted past resistance at $85 on Friday, and instead just been content to remain in the confines of its bullish guideposts, then this discussion may not even be happening now. It did happen though... AMN went nuts on its highest volume day in years. That may be all the reason the profit-takers - and there are plenty of them - are going to town today.
The problem is, the selling today may fuel more of the same tomorrow, and the next day, and the next day. In fact, the bleeding may not stop until Ameron shares are back at their support level, currently around $58.00. That'll be our target (the support line - not the $58 mark).
It was only a few weeks ago we were panning TerreStar Corporation (TSTR), but since then the stock/chart has taken a healthy turn for the better.... though it's still apt to be a little rocky in the short run.
We've zoomed out to a weekly chart of TerreStar to really show you the bigger picture here. TSTR has now formed two support lines, the latter one more bullish than the former. At the same time, the stock has established something of a base around $1.15.... which would be a good stop level.
Though making higher highs and higher lows, it should be noted (and this is clearer on a daily chart) that TerreStar shares are presently at the upper end of a bullish trading range. From here they're going to make a monster breakout, or slide back to the lower support level again. We expect to see the latter, though that's actually a healthier buying opportunity for TSTR.
Let's use $3.00 as a checkpoint target, meaning we're not going to sell for sure there - just revisit.
Though odds are good that Digital Angel Corporation (DIGA) will hit a headwind after today's 12% move (they already have in fact), the high-volume gain so far still bodes well in the long run. In fact, DIGA has already made its highest-volume gain in years today.
The key here is support at $1.03. As long as it holds, Digital Angel remains in the hunt for a breakout. The best part about this chart is that such a breakout will be occurring after a pretty healthy pullback... as opposed to coming right after a hot run. Still, it's better to buy on the way up rather than fish for the exact bottom. Safety-oriented traders should wait for resistance at $1.49 to crack.
Our upside target for DIGA - if it makes a run - will be resistance around the $6.00 area.
We almost didn't mention AEterna Zentaris, but strong volume behind the recovery effort convinced us this chart had more upside potential than downside risk. It's not a judgment call of the company's merits.
Let's just place a target for AEZS at $2.77, where the upper side of the August gap lies. Don't be stubborn here though... the stock may never make it there. The bulls just have a little momentum for the time being.
If you'd like to know of any changes in our opinion of DIGA, TSTR, AMN, or AEZS (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.
