Todays Big Stock: Pharmasset, Inc. (NasdaqGS: VRUS)

Believe it or not, there are still stocks in this market that are maintaining current trends higher. Some are actually at or hitting new 52-week highs. When it comes to trading a stock hitting a 52-week high, I prefer stocks hitting a “NEW” high. To me, this would be a stock that hasn’t hit a new 52-week high in quite some time, or at least has a key area of resistance to break through. One such stock that may fit that description would be that of Pharmasset, Inc.

Pharmasset, Inc. is a clinical-stage pharmaceutical company focused on discovering, developing, and commercializing novel drugs to treat viral infections. The company focuses on the development of nucleoside/tide analogs as oral therapeutics for the treatment of chronic hepatitis C virus (HCV) infection. Nucleoside/tide analogs are a class of compounds, which act as alternative substrates for the viral polymerase, thus inhibiting viral replication. Pharmasset has three clinical-stage product candidates. It also has a series of preclinical candidates in preparation for clinical development.

To review Pharmasset’s stock, please take a look at the 1-year chart of VRUS (Pharmasset, Inc.) below with my added notations:

 

As you can see, VRUS has been trending higher during the entire 1-year timeframe. After trading sideways between $50 and the $70 resistance (green) for a couple months, the uptrend continued higher and the stock seems to have run into resistance at $80 (red), while being supported by $75 (blue). Although short in duration, that $80 level does seem to be a resistance that would signify an important 52-week high breakout if VRUS could manage to break above it. From there, the stock should be heading higher in its uptrend.

The Tale of the Tape: After breaking out of a sideways move between $50 and $70, VRUS has formed a short-term resistance level of $80, which would be a 52-week high breakout if VRUS can above it. That breakout should signal higher prices ahead for the stock. A long trade could be entered on a break above $80, or on a pullback down to the $75 level with a stop below the level of entry. If the market were to sell-off substantially, and bring VRUS back down to $70, a long position could also be entered with a stop below that level.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Juniper Networks, Inc. Common S (NYSE: JNPR)

Juniper Networks designs, develops, and sells products and services that together provide its customers with network infrastructure that creates responsive and trusted environments for accelerating the deployment of services and applications over a single network. Juniper Networks serves the networking requirements of global service providers, enterprises, and public sector organizations that view the network as critical to their success. The company offers a product portfolio that spans routing, switching, security, application acceleration, and identity policy and control, which are designed by management to provide performance, choice and flexibility. Juniper Networks operations are organized into two segments: Infrastructure and Service Layer Technologies.

To review Juniper Networks’ stock, please take a look at the 1-year chart of JNPR (Juniper Networks, Inc.) below with my added notations:

After breaking drastically lower in July, JNPR fell into a sideways, consolidation pattern know as a Rectangle. This type of pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. The nice thing about a Rectangle pattern is that it will provide you with clearly defined breakout and breakdown points. For JNPR, the Rectangle pattern formed a $22 resistance (red) and a $20 support (green). Now that JNPR has broken the $20 support, the stock should be moving lower overall.

Chart patterns can also provide price targets. Simply take the height of the overall pattern and add or subtract that amount to or from the breakout or breakdown point to get the minimum price objective. For example, since the Rectangle pattern for JNPR is $2 high ($22 – $20), JNPR should fall to a minimum of $18 ($20 – $2) now that the stock has broken below the $20 level. Chart pattern price targets are certainly not guarantees, but they are often fulfilled.

The Tale of the Tape: JNPR had formed a very common chart pattern know as a Rectangle. This pattern shows clear breakout and breakdown points for a potential long or short position. For JNPR, now that the stock has broken its support, a trader would want to enter a short position on any rally back up to $20. It is at that $20 level that a trader would expect the “old support to become new resistance”.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Liberty Global, Inc. (NasdaqGS: LBTYA)

The last week or so in the market has seen some significant drops, but Friday may have started a short rally. You should probably have noticed that a lot of stocks in your watch list broke below key levels. So, if the market does rally a bit, might that bring some of those stocks back up to their break down points? One stock that could potentially make that sort of move is that of Liberty Global Inc.

Liberty Global, Inc. (LGI) is an international provider of video, broadband Internet and telephony services, with consolidated broadband communications and/or direct-to-home satellite operations. The company currently serves around 18 million customers across 14 countries, primarily in Europe, Chile and Australia. The company’s European operations are conducted through its subsidiary, Liberty Global Europe Holding BV. Its operations in Australia are conducted primarily through Austar United Communications Limited, in which it owns a 54.2% indirect majority ownership interest. LGI’s operations in the Americas are conducted primarily through, UPC Holding BV’s 80% owned subsidiary VTR Global Com SA in Chile and it’s wholly owned subsidiary Liberty Puerto Rico.

Before discussing a potential trading opportunity with LBTYA (Liberty Global, Inc.), please review the 1 yr. chart of LBTA that I have outlined below, with my added notations:

 

LBTYA has a very important price level at $40. First, $40 was resistance back in November. After breaking above that $40 mark in January, it became clear support for the next 6 months. Now that the stock has broken back below that level, $40 has started acting as resistance yet again.

The Tale of the Tape: LBTYA has a clear area of resistance at $40 that has always been an overall important level to the stock. If the market, and LBTYA, continues to rally higher from Friday, a short position could be entered at $40 with a stop above that level.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

 

Todays Big Stock: Itron, Inc. (NasdaqGS: ITRI)

The last couple of days in the market have seen some significant drops, yet again. As a result, you should probably be noticing that a lot of stocks in your watch list are breaking below key levels. This is not a bad thing at all, rather just new opportunities presenting themselves! One stock that I’d like to review for those potentially new opportunities is that of Itron Inc.

Itron, Inc. is a technology company, offering end-to-end smart metering solutions to electric, natural gas, and water utilities around the world. Itron’s metering solutions, meter data management software, and knowledge application solutions bring additional value to a utility’s metering and grid systems. Its professional services help its customers project-manage, install, implement, operate, and maintain their systems. The company classifies metering systems into three categories: standard metering, advanced metering systems and technology, and smart metering systems and technology.

Before discussing the potential trading opportunities with ITRI (Itron, Inc.), please review the 1 yr. chart of ITRI that I have outlined below, with my added notations:

After breaking below its key level of $50 (brown), ITRI fell into a consolidation zone between the $35 level (green) and the $40 level (red). As with a lot of stocks, ITRI broke its $35 support this week and is continuing lower as expected. Based on the stock’s history of developing key levels at the increments of $5 and $10 ($35, 40, 50, etc.), I would expect the next level of support for ITRI to be at $30.

The Tale of the Tape: ITRI has broken its previous level of support at $35 and is moving lower. Based on the stock’s history, and your stance on the market at that time, a long trade could be entered at $30 with a stop below that level. On any potential rallies, a short position could be entered at $35 with a stop placed above that level.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

 

Todays Big Stock: Starwood Hotels & Resorts (NYSE: HOT)

After writing an article earlier this week on H, I decided to search throughout H’s industry to see if I could find another stock that might also provide a couple of good trading opportunities.  One such stock I found fit that description in H’s industry would be that of Starwood Hotels & Resorts Worldwide Inc.

Starwood Hotels & Resorts Worldwide, Inc. is a hotel and leisure company. The company conducts its hotel and leisure business both directly and through its subsidiaries. Its brand names include St. Regis (luxury full-service hotels, resorts and residences), The Luxury Collection (luxury full-service hotels and resorts), W (luxury and upscale full service hotels, retreats and residences), Westin (luxury and upscale full-service hotels, resorts and residences), Le Meridien (luxury and upscale full-service hotels, resorts and residences), Sheraton (luxury and upscale full-service hotels, resorts and residences), Four Points (select-service hotels), Aloft (select-service hotels), and Element (extended stay hotels). The company is organized into two business segments: hotels and vacation ownership and residential.

To review Starwood’s stock, please take a look at the 1-year chart of HOT (Starwood Hotels & Resorts Worldwide Inc.) below with my added notations:

HOT has created a couple of short-term price levels over the last month. First, HOT has formed a clear resistance area at $45 (red). In addition, the stock has also been climbing a short-term, up-trending support level (green). These two levels combined have HOT stuck within a common chart pattern known as an Ascending Triangle that will eventually have to break one way or another. If the break is higher, the upper levels of $50 and $55 could come into play as well.

A break above $45 should signal higher prices for HOT, but if the stock were to break the up trending support line instead, HOT will most likely hit new 52-week lows.

 

The Tale of the Tape: HOT is currently stuck between two very important levels for the stock: The up-trending support and the $45 resistance. A long trade could be made on a break above the $45 level or on a pullback to the up-trending support (currently near $40) with a stop placed under the level of entry. On the other side, you could enter a short trade on HOT at the $45 resistance or if the stock breaks below the up-trending support level. In that case, a stop should be placed above the level of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT