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Registered User
Joined: 12/2/2004
Posts: 1,775
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I've had OTEX on my watchlist right after my basic Telechart scan alerted me to its huge volume surge and price spike April 1 . It's since formed a picture perfect handle to shake out the remaining weak hands as price hovered near Feb. resistance, and now this morning it has signaled a buy with its handle breakout on high early volume. If anyone wants to know what a legit cup with handle chart formation looks like, study OTEX's chart with daily bars at zoom 6. It takes a half dozen or more factors to make a legit cup/handle per IBD, and they should know as their founder is the one who discovered/publicized the power of the pattern. It's the highest rated overall stock in its industry group of 116 stocks. The overall rating combines technical and fundamental data. Long OTEX with starter position this morning, hope to add couple more times at 35.60 and 36.10 areas, current stop at 34.40.
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Registered User
Joined: 3/24/2006
Posts: 72
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Looks beautiful. Will add some calls once it hits 36.1. Thanks for the tip! :)
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Well, a beautiful chart doesn't guarantee a beautiful follow-through. That is one of the ugliest intraday whipsaws I've entered into in quite a while, but that's what stops are for.
FWIW I also bought BKE this morning. It's formed a solid 2 month flat base and broke out of resistance on good volume. I've got a starter position in it now...maybe it will follow through better by day's close and signal another piece to add. It's up 3 days in a row but a check of its chart past few months shows it can make much stronger moves before pulling back.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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OTEX has an eye whopping short position of 42%. Don't know, but a hunch the rapid selloff there was shorts loading up again, taking advantage of the earlier price spike. Normally I don't let a short position of double digits deter a good setup, but 42% a bit excessive I think....new rule. Of course it can work the other way too with massive short covering, but then the trade turns into a roulette spin instead of thoughtful speculation.
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Registered User
Joined: 7/28/2007
Posts: 118
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I took a position in OTEX yesterday as well. Unless I see strong movement today, I'll be out before I ever hit my 8% stop. This is not a good sign to have a legitimate breakout then close so low when other stocks move so well. This one is definitely suspect. Another concern for me yesterday was the volume wasn't really all that strong across the board for such a strong price move.
I have been in WW, and IIVI for a couple of weeks now both have really held up well. Took a position in NXY on Tuesday's strong break out of over 200% above average volume, which is working for now.
I will not add to anything until I see the market show some real enthusiasm.
RSTI is setting up a nice cup with handle as well. Volume dried up well in the handle, and BOP is starting to show up on the move up over the last few days. All we need is big volume to confirm entry at 47.82. Sales are a little lite.....
Griz
Thanks,
Griz
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Hi Griz.
Well lo and behold IBD is out on its site this morning highlighting OTEX's cup/handle pattern and yesterday's handle breakout. They mention the price faltering but apparently still like the overall pattern coupled with OTEX's fundamentals. But they don't mention the huge short position, oh well.
I agree with you on RSTI....good to know someone else in the universe watches out for those cup/handle setups:)
WW and IIVI, they keep popping up on my TC and IBD scans, and I keep wishing I had gotten in them earlier, great for you. Also good to know someone else in the cosmos buys double digit stocks that show trending strength:)
I added a bit more to DAR yesterday; I like it's volume action last few days...sorta shaping a rough and shallow cup, maybe it doens't need a handle since pattern overall not too deep.
Pete
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Registered User
Joined: 7/28/2007
Posts: 118
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fpetry,
Not sure why they wouldn't mention the short interest, especially the way the stock whipsawed...Still holding with a loss, but I think I am going to hold it a little longer to see if it isn't simply small holders taking a quick profit on the pop.
I have been watching DAR too. It's fundamentals are excellent. What stage base do you consider it to be in a second or third? Just curious....It looks to me like it may be at least a second stage..probably too risky for me since I am not already in it.
I missed KOP coming out of a DBL Bottom, it broke out on 4/8. Up around 10% already. I may have to bite on IBD's alert service after all so I can catch these stocks I have spent time researching.
Another one I was watching and missed was BDE out of a Dbl Bottom w/handle, also up 10% or more....Just not willing to go all in yet, but it does hurt to watch these you pick fly away while you are on the sidelines being scared.
I agree it is good to have someone to bounce ideas off of that is using a similar method. Good talking with you.
Griz
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