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.
The stock market made a complete about-face a few moments ago, slipping into the red with no warning. The move accents the need for traders to focus only on the best of the best ideas, like Rexahn Pharmaceuticals, Inc. (AMEX:RNN), Rodman & Renshaw Capital Group Inc. (NASDAQ:RODM), and TerreStar Corporation (NASDAQ:TSTR). Let's review each chart in-depth.
Look out below if you're an owner of Rodman & Renshaw Capital Group Inc. (NASDAQ:RODM). At the point in time this write-up was begun, the stock was trading at $5.01. Now it's at $4.66, and still tumbling.
Nobody can say the implosion was a complete surprise. Rodman & Renshaw Capital shares started to hit a headwind with resistance at $6.40, and a couple of waves of distribution inspired current owners to start taking profits on RODM (if which there were plenty).
As for where RODM could end up bottoming, notice there's a major Fibonacci line at $4.46 that was also a support area - briefly - in early September. If that line snaps though, Rodman & Renshaw doesn't have another support level until $3.11.
In the bigger picture though (take a look at a weekly chart), the shift to a bearish phase is crystal clear.
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Rexahn Pharmaceuticals, Inc. (AMEX:RNN) is hanging by a thread.... and the thread is starting unravel.
If the name rings a bell, it might be because we posted a bearish view of Rexahn Pharmaceuticals back on October 20th. RNN shares were trading at $0.71 at the time, but we suggested the major outside bearish day form the 19th was a bearish omen. The stock's at $0.69 today.... which isn't a lot lower, but the persistence of the bears is taking a toll.
The key here - for better or worse - is the support at $0.68. That's where Rexahn Pharmaceuticals has found a floor since our chat on 20th, and it's also where RNN shares found support back in July. In other words, it's a pretty important line in the sand. When/if it snaps though, a lot of bearishness is going to be unleashed in a short amount of time.
Misery may finally be over for TerreStar Corporation (NASDAQ:TSTR) owners.... or not. The stock's at a major inflection point as of right now, though the question hasn't been unanswered yet.
Just for the record, I warned you of this pullback back on September 30th. The stock's surge was just too hot to handle, and sure enough, TerreStar Corporation fell back from my warning level of $2.55 (after a peak at $2.95) that day to the current price of $1.39 - you can thank me later.
Now, however, TerreStar is resting in the support line I traced then... the one extending through the lows going back to June that formed the primary wedge pattern. I'm still not convinced this will be the rebound point, but I find it suspicious this is where TSTR has halted the decline.
Bottom line? Keep TSTR on your watchlist, and I will too. I think this one is going to be trade-worthy soon. I'll let you know via the newsletter.
If you'd like to know of any changes in our opinion of TSTR, RNN, and RODM (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.
