Friday, September 25, 2015

Stocks to Watch: VTL, PLUG, GPRO

Vital Therapies Inc (NASDAQ:VTL) Today's rally confirms that the bounce is still in play and far from over. The stock broke out of a consolidation range as the stock closed up 91c on the day. Thursday’s high was $4.79, which is resistance for Friday’s continuation move. As long as the stock stay above the $4 area, the short-term bullish scenario is still intact.

Plug Power Inc (NASDAQ:PLUG) surged in the final hour of trading closing slightly higher. The stock continues to show some nice strength in this market. Technical chart shows bullish sign with A/D rising and MACD on top of signal line. Keep it on your watch list going forward.

GoPro Inc (NASDAQ:GPRO) looks like it is starting to turn back up and the daily technical indicators are giving the first bullish signs. The Stochastic oscillator is registering a bullish signal, as the %K has crossed above the %D and the RSI is rising slowly but hasn’t reached the 35% level. The stock has the following important levels. Resistance at $34 and support at $32.26

Biotech $IBB on Sale, Get Ready to Buy

Stocks opened the week with on-balance gains, but biotechnology stocks fell sharply with iShares NASDAQ Biotechnology Index (ETF) (IBB) plummeting 4.5% on the day. This made health care the only sector of the S&P 500 to show a loss, down 1.4%.

Presidential candidate Hillary Clinton was blamed for the sell-off following a tweet that she is ready to propose a plan that would target “price gouging” by specialty drugmakers.

Despite Monday’s biotech losses, IBB is still up 12.2% year to date.

At the beginning of a correction or bear market, even previously strong sectors — like biotech — are subject to highly volatile days.

The heavy selling in IBB drove the ETF below its 200-day moving average and confirmed an intermediate downtrend by failing to rise above its 50-day moving average.

The breakdown from an ascending wedge will probably end in at least a 20% decline from the July 20 high at $400 for a minimum downside target of $320. IBB could even challenge the low of $284, made on Aug. 24, but that is unlikely.

While IBB looks poised for a deeper decline, the growth rate of the biotech group is spectacular. Traders may want to place good ’til cancelled (GTC) orders to buy their favorite biotech stocks at a 20% discount to their recent highs.

NorthStar Asset Management Group Inc (NYSE: NSAM)

Northstar Asset Management Group Inc. provides asset management and other services in the United States and internationally. It also offers securitization transaction services. The company is based in New York, New York. Northstar Asset Management Group Inc. operates independently of NorthStar Realty Finance Corp. as of June 30, 2014.
Take a look at the 1-year chart of Gulfport (NYSE: NSAM) below with added notations:
1-year chart of Gulfport (NYSE: NSAM)
After rallying from October into March, NSAM consistently declined over next five of months. Since bottoming in August, the stock has been consolidating within a sideways range. While in that sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
NSAM’s rectangle pattern has formed a resistance at $17.50 (red), which has also been a prior support, and a $16 support (green). At some point the stock will have to break one of the two levels.

The Tale of the Tape: NSAM is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $16 or on a breakout above $17.50. The ideal short opportunity would be on a break below $16.

Breakdown in Rockwell $ROK Stock Could Make Traders 20%

Rockwell Automation (ROK) — This manufacturer and developer of equipment, software and engineering solutions for factories and process automation has had a steady record of growth. While analysts forecast earnings will increase 7.5% in fiscal 2015 (ended in September) to $6.63 per share, they estimate revenue will decline 3.5% to $6.4 billion. The company is scheduled to report in mid-November.

Rockwell Automation has seen a rise in factory utilization rates, but this has been offset by currency difficulties and problems with the European economy. Spending on new product development could also limit profits.

And S&P Capital IQ says that although demand for automation products is likely to increase over the next 12 months, its analysts feel this is already discounted into the share price.

The chart is bearish with a death cross at about $115, strong negative volume building, a sell signal from the internal MACD indicator and a sharp intermediate downtrend line.

It is however possible that ROK stock could have a recovery bounce to the intermediate resistance line at $106. Therefore, my recommendation is to either sell shares short on a rally to $106 or on a break below $102. My downside target for this short sale is $85 for a potential gain of 17% to 20% depending on your entry point.

As with all short sales, check with your broker for any restrictions. And be aware that if you hold shares short through the ex-dividend date in mid-November you will have to pay the owner the 65 cents per share due.