Oct 16, 2009 @ 12:44 PM PDT
When the recession hit, Audiovox was already in the process of cutting its fat, whereas other companies were only just beginning.
There was a smidgen of hope that Liz Claiborne, Inc. (NYSE:LIZ) would find support at a long-standing support line (blue), but that hope was lost today with the sharp 9% drop to a low of $4.75. Now that the damage is done, Liz Claiborne shares could make their way much lower.
Actually, there is another bastion of hope for LIZ, but it's a long shot. The 61.8% Fibonacci retracement line at $4.55 still looms. Given the strength of the support line that was snapped though, coupled with the relatively heavy selling volume we've seen since mid-October, the odds are mostly stacked against Liz Claiborne.
How far? If the $4.55 floor is broken, there's not another Fib line to work with. LIZ did make lows at $4.15 and $3.16 though... a couple of the nodes that trace the key support line; those will be decent target prices. Assume nothing though... I'm playing this one by ear.
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Sometimes, good old-fashioned momentum can be more productive for a trade than anything else. And, Oclaro, Inc. (NASDAQ:OCLR) is the beneficiary of that particular characteristic right now.
I'm not going to focus on the way Oclaro has been rallying since March. Most stocks have done so - no big deal. Instead, I'm going to focus on the strong accumulation trend we've seen from OCLR after (and despite) a huge distribution day back in June.
Perhaps eve more important is that OCLR has finally broken above a very long-term falling resistance line, and is close to moving above a horizontal resistance line at $1.30. The $1.30 mark, in fact, has been support as well as resistance for Oclaro, Inc. over he past several months, so getting above it too may be a huge upside catalyst. Personally, I'd wait for Oclaro to make a few closes above $1.30 just to be sure, but this looks like one of the better long-term bullish ideas I've seen in a while.
And finally, I want to look at TerreStar Corporation (NASDAQ:TSTR) again, mostly because it hasn't made good on what could have been a bullish event a few days ago.
The event in question came on the 6th, when TerreStar Corporation shares moved above a falling resistance line by virtue of moving sideways while the line fell under the stock. It's a dubious success, but still one worth mentioning.
That said, the concern I had about TSTR hitting resistance as it did at $1.19 was not unmerited. See, TerreStar Corporation has used that level as support just a few weeks prior, and support levels have a funny way of coming back into play in the future, even if in a slightly different role.
Though the volume behind the slight rise from TSTR over the last few days has been light, I still see TerreStar Corporation as a huge upside opportunity. The cult-like followers are ready to buy - all they need is a catalyst like a move to $1.20 or higher. Keep it on your watchlist until then.
If you'd like to know of any changes in our opinion of OCLR, LIZ, and TSTR (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
