Saturday, 23 February 2008

Precise to the COHR?

In this time of great uncertainty for the US stock market, it's a bit difficult to look for issues that one can buy. Fortunately, we found one.

Coherent Inc. (Nasdaq:COHR), a company involved in laser and its applications in business & science, was previously moving in a general sideways movement until a sudden drop happened in November 2007. That lead to a low of around $22.00 in January and it has steadily risen since then.

Currently, COHR has been consolidating in what seems to be a pennant formation. Based on the data as of Feb. 22, 2008, the resistance of the pennant for the next trading day would be at $28.67. The projected upside target is now pegged at $31.00. The cut loss for this would be a break of the support of the pennant at $28.16. The momentum for COHR is still intact as can be seen with its MACD. As for the moving averages, the 100MA is serving as a support at 28.13

So what are we saying here? Despite the prevailing uncertainty and bearishness in the market, there are issues that will be like salmon as they swim against the trend. The question remains if this salmon can survive the resisting force or will it find itself as sashimi?

Saturday, 9 February 2008

DISCA Sucks

Not because the symbol resembles a fad in the 70s that should stay dead but rather of what the price of Discovery Holdings A shares (Nasdaq:DISCA) is currently doing. This company that has involvement in media, has already gone sideways and broken down.

Let's see what the chart tells us. From Oct. 2006 to Aug. 2007, there is a clear uptrend. Then starting from August onwards, it has gone sideways to form what looks like a descending triangle. Based on previous levels, it is safe to presume that there is a support at 22.51. This has already been broken with significant volume. Since prices are already below the moving averages, we already know there's bearishness in DISCA. Add to that, the MACD of the stock has been oscillating below zero since November 2007. This only confirms the bearishness we mentioned earlier.

Should this continue to fall, we see a downside target of 16.22. That's a 28% return! All I have to do here is to short it at the right price and wait for a maximum of around 6 months to reach the downside target, or I get stopped out. Whichever comes first.

So now you know why DISCA sucks. It sucks for those going long on it.