Market Comments Submitted by Nick at Ambitions as a Stock Trader

By admin | April 8, 2008

Rating 3.00 out of 5

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Stock Picks and Trade Ideas for Monday

New Buy Candidates: AEHR, NCOC, NOG

New Short Sale Candidates: FSLR (if it closes near its LOD-currently at 282.85), GHM (currently at 52.10)

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Update: FSLR makes a good short-sale right now. The stock is reversing hard and hitting its LOD on above average volume. This looks like a short-term top for the stock.

Here is the problem with GHM. I’ve noticed that there are quite a few people that are bullish on it. I’m not trying to bash anyone who is actually long or bullish on GHM. It is just a matter of differing opinions. Anyway, here is the chart of GHM and the reason why I am bearish on it…for now.

Graham Corp (GHM- AMEX) 3 month chart

A. This is where the problem lies. For one, the 50 day Ma is still below the 200 day Ma. This indicates that the stock has not properly set up a base for a healthy breakout. Also notice how extended GHM’s movement has been right from the beginning. These thrust-like breakouts are too far away from the initial trend (which has been left behind at the main moving averages (50 and 200 day). Normally, you would have liked to see the trend much closer to the main moving averages such as in exhibit B. The only positive that I can see is the strong RS at the moment. Still, I don’t believe that this will be a sustainable move on the long side.