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Breakouts
for Feb 15th: I am keeping the comments brief. The
first pick, FII, has been an ongoing feature as a Subscriber pick for September, and a Breakout play for January. As I stated in my market comments, now is a good time to raise stops in stocks to their most recent reaction lows, and this is a good example why. The stock is close to a new breakout, but the MACD 'sell' trigger, combined with a bearish divergence in the indicator is reason enough to take profits. Slow stochastics and on-balance-volume are firm - but all rallies have to come to an end, and this one may come soon. Note, I have retained the original price target. The
second pick, HA, has been stirring the pot with a lawsuit against MESA (although I would welcome $43 interisland fares), and announced plans to buy more jets. Tuesday's breakout has stretched the boundaries for a relatively low risk entry, and using GTC buy orders into the low $4s would appear to be the best foot forward. In the bulls favor was an important close above the 50-day, and 200-day MAs (the latter in particular). Resistance is likely to kick in around $6, but watch for a point-n-figure chart breakout on a move to $4.50. The third
pick, KNDL,
is another stock for which a decent risk:reward is hard to call. GTC buy orders down to $26.51 would facilitate a more prudent stop around $22.50 (although even that would be a high level of risk). Tuesday's close wasn't quite enough to break resistance, so some form of pullback on Wednesday looks likely. Breakouts in MACD, and on-balance-volume resistance favor the bulls. The stock has been in rally mode from $5, but Tuesday's action did trigger a double top breakout on the point-n-figure chart with a price target of $44.00.
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