This stock has good chances to rise in the short and mid term as more technical signals are converging and the current price is in the $5-$10 range, where the chances for a double-digit percentage move are really high.
Here are a few elements that are pointing towards a higher price:
- high volumes at local lows in November ($2.65-$4.65 area)
- exhausting gap down on over 100M volume day
- price is over the 50 day exponential moving average (green) and the crossover volume was high
- low volumes in the last few weeks, in a narrow price range between the 50 EXPMA and 100 EXPMA
- good internal wave structure starting from the most notable previous local highs in February 2012 (according to Elliott Wave analysis - not labeled in the chart in order to make it clear)
Having all this clues noted, the investors should look for the next scenarios:
- immediate break above the current resistance from $5.50 (probably this week), followed by a quick retest of $5.500 as a support and then resuming move up.
- another week or two in the same price range ($4.50-$5.50) on relatively low volumes (indicating an accumulation) followed by the break above the $5.50 resistance (as a confirmation) and reaching afterwards for the closest target zone.
The first TARGET ZONE is in the $7.90-$9.00 area.
IMPORTANT: earnings report for Q3 is set on 8th of February!
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