The Biotech sector IBB, XBI, FBT etc. is still the best performing sector out there. The Semiconductor sector SMH, is acting very strong and is somewhat more interesting as single stock risk is generally less pronounced as opposed to individual Biotech stocks that disappoint. But Biotech is outperforming Semiconductors right now. So one simply cannot ignore the sector. That being said a Biotech stock I have been monitoring for quite some time looks like it is about to run right now.

I am talking about RGLS – Regulus Therapeutics. I mentioned I’ve been monitoring this stock for a while. You guessed right, it popped up in my scans the day it printed a game changing gap to the upside. It is really that simple. If you run scans and search for stocks with abnormal activity and huge volume, you will find all future big winners. Scanning alone is not enough though. It is simply a means to replenish watch lists. Then the hard work starts. Doing further research, being disciplined and patiently waiting for the stock to put in a consolidation and then entering a position once the stock flashes signs it might be ready to resume its new uptrend. I can only speak for myself, but the hard work part means I go through more than a thousand charts every day. For me personally there is no other way to get a feeling for the market. Enough said, on to the charts.

Click on RGLS chart to enlarge:

As you can see in my chart annotations RGLS – Regulus Therapeutics is displaying all the character traits I am looking for:

  • High short interest and low float stock
  • RGLS is trading above all the significant moving averages (20, 50, 100, 200)
  • The bullish descending wedge pattern has morphed into an even more bullish ascending triangle pattern
  • The stock displays an initial gap up and a thrusting move on huge volume, consolidated and is now about to resume its uptrend

If you are a regular reader you know what I am going to say now. Thrusting move, consolidation, resumption of the trend leading into the consolidation pattern in ABC pattern style. Simple straightforward analysis. There is really no need to overcomplicate things.

Remember: I am simply playing the odds here. There are no guarantees individual trades will work. Keep trading set-ups offering superior odds and keep managing risk. You will end up owning a few super winners every now and then. RGLS – Regulus Therapeutics sure is displaying all the needed ingredients. A great technical set-up and proper pattern pressure for RGLS to develop into a potential monster performer.

Show me the charts, and I’ll tell you the news. – Bernard Baruch

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The chart of SIMO – Silicon Motion Technology is a stock offering ‘Blue Sky Potential’. That will obviously only be the case once the bullish cup with handle pattern completes. A completion of the pattern will coincide with a break out to new all time highs. We are not there yet. Also keep in mind the company will announce earnings on Jan 26th.

Still, the chart looks very constructive and the All Time High should act as a price magnet. Overall the semiconductor sector looks very healthy. Therefore odds for stocks like SIMO to be outperforming are very high. The reason is simple: they have almost no overhead resistance. One way to play SIMO would be to buy an initial position and to add more if the stock reacts positively to earnings.

Click on SIMO chart to enlarge:

Conclusion: The whole reason for this post is to highlight a chart set-up with ‘Bullish pattern pressure + Blue Sky Potential’. This is the best and most bullish combination you could ask for. Of course earnings are due next week and as usual there are no guarantees. Then again, trading is not about guarantees but about putting odds in your favour.

SIMO company description from Yahoo finance:

Silicon Motion Technology Corporation, a fabless semiconductor company, designs, develops, and markets semiconductor solutions for mobile storage and mobile communications markets. It provides mobile storage products, including microcontrollers used in solid state storage devices, such as solid state drives, eMMCs, and other embedded flash applications, as well as removable storage products, such as flash memory card controllers and USB flash drive controllers; and mobile communications products, such as mobile TV SoCs and handset transceivers. Its products are used in smartphones, tablets, digital cameras, notebooks, desktop PCs, and industrial and commercial applications. The company’s mobile storage products are marketed under the SMI brand and mobile communications products under the FCI brand. It markets and sells products through direct sales personnel and independent electronics distributors to original equipment manufacturers and module makers worldwide. Silicon Motion Technology Corporation was founded in 1995 and is headquartered in Zhubei City, Taiwan.

I always believe that prices move first and fundamentals come second. – Paul Tudor Jones

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The chart of TSEM – Tower Semiconductor is displaying an overall bullish look. There is a lot of pattern pressure as the stock has formed a bullish flag pattern. It looks like TSEM broke out to the upside today. If that’s indeed the case then TSEM should proceed to take out and close above 14$ in the very near future. As it was former resistance the 14$ price level is the most likely region to contain a cluster of stop buy orders.

If those stop buy orders get triggered and TSEM can close above the 14 level my best guess is for the stock to launch a move to the 17 – 18 $ area. This would be the ABC price target as seen in my chart annotations.

Click on TSEM chart to enlarge:

TSEM company overview from Yahoo finance:

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures analog intensive mixed-signal semiconductor devices in the United States, Asia, and Europe. It produces integrated circuits (IC) primarily based on third party designs and proprietary designs with geometries ranging from 1.0 to 0.11 micron, as well as provides design and technical services. The company also offers a range of customizable process technologies, including SiGe, BiCMOS, mixed-signal and RFCMOS, CMOS image sensor, power management, and non-volatile memory, as well as MEMS capabilities. Its ICs are used in a range of products in various markets, including consumer electronics, personal computers, communications, automotive, industrial, and medical device products. The company offers its foundry services to fabless semiconductor companies and independent device manufacturers. Tower Semiconductor Ltd. was founded in 1993 and is headquartered in Migdal Haemek, Israel.

Imagination is more important than knowledge. – Albert Einstein

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Right now one of the most visible and biggest Uranium stocks, CCJ – Cameco or CCO.TO in Canada, is offering a great trend following trading opportunity. I did a quick video analysis explaining what I see and analyzed the current technical situation from a psychological perspective.

The key points are the following:

Since Fukushima, which created a huge gap down in the charts, we first saw a downside move. Then CCJ proceeded to trade within a sideways trading channel for roughly 3 years. Price has now broken to the downside. That means everybody who is still holding the stock or added to their position post Fukushima is now showing a loss. The past 3 years can only be considered a ‘Hope Pattern’. Traders were hoping for a close of the gap down, or a return to ‘normal’, whatever that might mean.

Now the trend is accelerating to the downside. It looks like there is no escaping the truth anymore. This is the type of technical situation where traders are most likely to throw in the towel. My best guess is that more and more traders are going to want to exit no matter what until the stock experiences final capitulation.

For those not familiar with the implications of ‘Break-away gaps’ or ‘Hole in the wall patterns’ I recommend reviewing the following two links where I explain the concept in detail:

In the CCJ video I discuss potential downside price target areas and how to find them using prior consolidation periods in the chart. Enjoy the video and if you like it, share it!

Here’s the direct link if you can’t see the embedded video: CCJ – Cameco Video Analysis

As I outline in the CCJ – Cameco Video Analysis, a low risk way to profit from the current technical set-up would be to buy put options as your downside is limited.

Click on weekly CCJ chart to enlarge:

You can also monitor the always up-to-date U.TO – Uranium Participation Chart on my public list.

Conclusion: From a purely technical perspective the highest odds proposition is a trend acceleration to the downside until capitulation volume kicks in. So far no significant increase in volume is noticeable on the weekly chart. When volume starts to kick in I expect it to coincide with price moves to the downside. In simple terms: My job as a trader is to now apply a trend following approach and stay short until price tells me otherwise.

The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong. – William J. O’Neil

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If the Internet of Things ‘IoT’ is the next big thing, then BBRY – Blackberry with its recent launch of a cloud-based IoT platform has the potential to become a red hot stock. I bought an initial position as you can see here:

Here’s a quick overview of various reasons why I am getting more and more interested in the IoT story and its potential:

Ultimately it is going to be about a company’s ability to gather all the information the connected ‘things’ will send out and make sense of all that info. Here’s were the software side of things comes into play. The last thing you want is your data to be stolen or compromised. Here’s where security comes into play. BBRY – Blackberry offers a solution for both needs.

BBRY has a a lot of cash, a rather low valuation and the latest earnings suggest the company is well on its way to turn around. The new CEO John Chen is famous for taking over struggling companies and being very successful at implementing the necessary changes. Ultimately opinions do not matter. Only the stock price will tell the story. On to the charts:

Click on weekly BBRY chart to enlarge:

As you can see in my chart annotations, volume is contracting. As the slope of the weekly moving average 30 is rising, this suggests odds for a break to the upside are higher. Hence an initial position makes sense. It is worth holding that position as long as BBRY trades above that MA 30. The true move will start once BBRY can clear the 11.20 price level. A stop buy order above that level is an easy and very straightforward way to increase exposure. I will aggressively add to my position if the stock proves it can move higher. Overall the weekly chart is displaying extreme pattern pressure that will soon be resolved. Let’s see if it is to the upside. As the IoT story is gaining traction BBRY might very well be the next stock traders pile into.

Click on daily BBRY chart to enlarge:

The daily chart shows price hitting multiple moving average support. Although the technical set-up is not ideal, for aggressive traders an initial position makes sense. The most recent run-up starting from below the MA 200 on increased volume is what I would label a thrusting move. The recent pullback is rather orderly and showing low volatility. But the true move will only start once the stock can clear the 11.20 level. It might prove to be an explosive move, but as of yet it is too early to tell. Placing stop buy orders to increase one’s position if the stock proves itself is the way to go. That way you eliminate emotions from the decision making process. Another thing that makes me bullish are the recent volume spikes whenever the stock goes higher. I view this as stealth accumulation.

The IoT has huge potential. There is no doubt about it. That’s why I tweeted the following:

Updated 01/12/15: 

Stock list of ‘IoT’ Internet of Things and ‘M2M’ Machine to Machine plays:

SWIR – Sierra Wireless, BBRY – Blackberry (former RIMM – Research In Motion), CAMP – Calamp, UBNT – Ubiquiti Networks, LOGM – Logmein, FSL – Freescale Semiconductor Holdings, NMRX – Numerex, ORBC – Orbcomm, FLTX – Fleetmatix Group, ITRN – Ituran Location & Control, ZBRA – Zebra Technologies, ESYS – Elecsys, BOSC – Better Online Solutions, MIFI (former NVTL) – Novatel Wireless, SIGM – Sigma Designs, CTRL – Control4 Corporation, LOJN – LoJack

Related Posts – Emerging high potential IoT leaders to keep a close eye on: 

http://www.tischendorf.com/2015/01/05/mifi-novatel-wireless-internet-of-things-iot-high-potential-stock/

http://www.tischendorf.com/2013/12/26/swir-sierra-wireless-leading-m2m-machine-to-machine-internet-of-things-stock/

Let’s see how things evolve. No matter what, never fall in love with a stock and heed the following advice:

The alternative to managing risk is not managing risk, and that never turns out well. – Mark Minervini

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MIFI Novatel Wireless – ‘Internet Of Things IoT’ High Potential Stock

January 5, 2015

Today’s winner in a sea of red is MIFI – Novatel Wireless, former ticker symbol NVTL. As I pointed out today on Twitter and Stocktwits when the stock was trading @ 3.30, right now this is my favourite really aggressive small cap play: $MIFI Holding up well the past few days. My favourite high potential [...]

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RDCM Radcom – High Potential Stock With Bullish Monthly Pattern Pressure

December 28, 2014

The Russell 2000 has just put in a 52 week closing high. Pattern pressure is huge, so if small caps start to outperform, this could be the beginning of a strong trend to the upside. Probably the most explosive small cap stock under extreme accumulation I can find right now is RDCM – Radcom. The [...]

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ISSI Integrated Silicon Solution – Chart With Bullish Accumulation Volume Pattern

December 13, 2014

This is a very interesting semiconductor company chart. ISSI – Integrated Silicon Solution is displaying early signs of aggressive accumulation. Although ISSI might not be an immediate buy here, I bought an initial position. Here are a few reasons why this stock could be a future winner in the making: ISSI printed a new 10 [...]

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RDWR Radware – Bullish Monster Accumulation Pattern Continues

December 12, 2014

Quick technical chart update for RDWR – Radware as the monster accumulation pattern continues. This is how superstocks begin their moves. Here is what I pointed out in my original analysis: RDWR – Radware ‘Institutional players with deep pockets accumulating as much as they can’ Click on RDWR chart to enlarge: The weekly pattern pressure [...]

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RDWR Radware Cyber Security Stock – Aggressive Accumulation Pattern

December 5, 2014

It simply doesn’t get much better than this. The charts are obviously bullish and should be pretty much self-explanatory. RDWR – Radware is displaying huge volume spikes. These are the footprints of institutional players with deep pockets accumulating as much as they can. The gap that started the move is a break-away gap. This is [...]

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