Stocks are up today, but after the implosion earlier this week, its pretty clear traders need to be ultra-picky right now. Among the most compelling trading ideas we ran across today are NCI Building Systems, Inc. (NYSE:NCS), Mesa Air Group, Inc. (NASDAQ:MESA), and Imaging3, Inc. (OTC:IMGG). See what you think.
Back on
October 20th we mentioned
Imaging3, Inc. (OTC:IMGG) posed a bearish risk after the rally stalled and resistance clearly developed at $0.74. Sure enough, stagnation was no friend to the stock; the unraveling has kicked in.
As you can see from the chart, the bears started gaining some momentum yesterday with IMGG. The stock broke down to reach $0.60 after waffling just under the ceiling line. Today we're seeing downside follow-through. Though the selling volume hasn't exactly been strong for Imaging3, Inc. shares, it is getting stronger now.
As for targets, we'll use Fibonacci lines as our framework. That puts the first downside target for Imaging3 at $0.48, and the second one at $0.31. The former was also a support level (briefly) in September for IMGG, while the latter is basically the gap level from September. So, both are pretty meaningful levels. Either way, Imaging3 likely has more weight on its shoulders than it can carry at this time.
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Despite the recent pullback from the peak price of $0.36, there's actually a light at the end of the tunnel for
Mesa Air Group, Inc. (NASDAQ:MESA) owners. If the stock's downtrend is halted today, it should be soon.
The chart below illustrates what's going on. There's a case for horizontal support (although it's a flimsy one) at $0.20, where Mesa Air Group shares found support in August. In the bigger picture, there's a rising support line currently at $0.17 for MESA.... the one that goes back to March's low.
I don't always trade these patterns, being more of a momentum trade than a reversal-fisher. In this case though, I think support for Mesa Air Group is going to be quite strong. Besides, the selling volume has been getting weaker as MESA has moved lower; the selling probably doesn't have much longevity.
It was only a few days ago we
exited an official long position on
NCI Building Systems, Inc. (NYSE:NCS), so it pains me to pose it as a bullish opportunity now. That said, it's hardly an outright 'buy'.... there are tons of conditions that go along with my moderately-bullish stance.
The key here is the reversal bar from yesterday (on super volume), and today's follow-through. The problem is, NCI Building Systems - even of they continue to move higher - still have lots of technical problems to contend with. Specifically, there's falling resistance at $3.18 for NCS, and I even have to wonder if the prior support line at $2.40 is looming above as resistance now; it's not often a stock re-enters a wedge it just moved out of.
So, while I do suggest you put NCI Building Systems, Inc. on your radar as an eventual trade possibility, I want to be clear it's not even close to being buy-worthy yet.
If you'd like to know of any changes in our opinion of MESA, IMGG, or NCS (or if we officially recommend them as
trades), be sure to sign up for our free newsletter today. It's delivered weekly.
To AB
Comment #2 Posted by James E Brumley Fri Oct 30, 2009 7:05AM PDT
# / Rating : 0 / 0.00 - 1 : 2 : 3 : 4 : 5
Thanks for the feedback AB. Yeah, I suspect this near-term chart forecast will fully play out before that happens. So, yes the pending FDA approval is a little irrelevant to short-term traders, much like the short-term chart is irrelevant to long-term investors. These technical calls are never about the stock's value, nor should they be interpreted as such. (I think we both basically understand that, but wanted t clarify for anybody else). That being said, we've heard the same FDA song and dance from Imaging3 before..... http://www.smallcapnetwork.com/Dow-Nasdaq-S-P-All-In-Major-Selloff-Mode-to-Kickoff-2008/af/archive/20080105-1/ . I literally talked to those guys - on the phone - three times back in January of 2008, and they told me they thought FDA approval was around the corner. Here we are nearly two years later saying the same thing. They might finally get it now, but I'm just saying.
IMGG
Comment #1 Posted by A B Thu Oct 29, 2009 11:09AM PDT
# / Rating : 0 / 0.00 - 1 : 2 : 3 : 4 : 5
Your chart analysis is astute but sort of irrelevant. IMGG's flagship medical device is nearing FDA approval. That might have some effect on the pps... just a hunch.
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