Technical Analysis
Eleven Stocks That Could Be Ready to Run
 By Joshua Hayes
RealMoney.com Contributor
3/26/2008 12:34 PM EDT
URL: http://www.thestreet.com/p/rmoney/technicalanalysis/10409335.html

There is no doubt that the market has been very bullish in the short term. However, the low volume bothers me, since I have been around long enough to have seen many strong rallies on low volume fail badly.

Market uptrends that come with a lot of accumulation and little distribution offer up leading stocks to buy up to 13 weeks after the follow-through day. On Thursday, the DJIA had that follow-through day, and so far we have not seen a lot of great patterns.

I have only a few near-perfect to perfect charts (I listed two of them last Wednesday) that have shown up as the market hammers out a possible low. But in 1998, 1999, 2003 and during the mini rallies within the uptrend from 2004 through early 2007, I always had plenty of strong stocks making strong gains.

This rally has had a lot of beaten-up laggards making strong gains, but the leaders are few and far between. Still, though, there are some possible leading stocks that, along with my current portfolio of longs, could soon join the party to the upside if this market is in fact hammering out a bottom.

Today, let's look at these charts:

Omega Protein
Click here for larger image.
Source: TeleChart Gold

If OME can pull back to the pivot point or 50-day moving average on low volume and then bounce on heavier volume, I would like to get long.

Titan Machinery
Click here for larger image.
Source: TeleChart Gold

TITN has broken out of a cup pattern on very strong volume. If it can pull back to the pivot point or 50 DMA on low volume, I would like to get long.

Air Methods
Click here for larger image.
Source: TeleChart Gold

AIRM needs a few more weeks to months to work on a right side of the base, and if it can then bounce on strong volume, I would like to get long.

TNS
Click here for larger image.
Source: TeleChart Gold

TNS has broken out on huge volume, and if I can get a low-volume pullback to the pivot point area or the 50 DMA, I would like to get long.

Greif Brothers
Click here for larger image.
Source: TeleChart Gold

If GEF-B can break out to a new 11-month high, on very strong volume, I would like to get long this stock.

Integral Systems
Click here for larger image.
Source: TeleChart Gold

If ISYS can pull back to the pivot point area or the 50 DMA on low volume and then bounce on strong volume, I would like to get long.

Perrigo
Click here for larger image.
Source: TeleChart Gold

PRGO is an extremely bullish stock with excellent price and volume action. If it can pull back on low volume to the 50 DMA and bounce on stronger volume, I would like to get long.

Martek
Click here for larger image.
Source: TeleChart Gold

If MATK can spend a couple to a few more weeks moving sideways and then bounce off the 50 DMA and breakout to a new 52-week high, on very strong volume, I would love to get long.

Micros Systems
Click here for larger image.
Source: TeleChart Gold

This is one of my favorite stocks on the basis of fundamentals and technicals. If MCRS can pull back on low volume to the 50 DMA in a nice orderly fashion and then bounce on very strong volume, I would love to get long.

New Market
Click here for larger image.
Source: TeleChart Gold

If NEU can pull back to the 50 DMA on low volume and keep that BOP green to max green (the colorful indicator at the bottom), I would love to add to my existing long position.

FTI Consulting
Click here for larger image.
Source: TeleChart Gold

Sadly, I was shaken out in February from my FCN long that was purchased on July 9, 2007. If I can get a pullback on low volume to the 50 DMA and then get a heavy volume bounce off of it, I would like to get long again.

After I go long, if any of these stocks reverse, I will cut my loss with a close below the 50-day moving average. These are all very nice technical patterns, but few look like the nice round price chart patterns that accompanied so many great leaders when the rally took off in March 2003.

So far, everything is OK, but remember, until we get more volume on the upside in the general market indices, we are still setting ourselves up for a potential failure. Too bad that when that time comes, too many will have been sucked in and will suffer the consequences of not watching volume.

Aloha.

At time of publication, Hayes was long NEU.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider OME, TITN, TNS, GEF and ISYS to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Joshua "MauiTrader" Hayes is CEO, president and founder of Big Wave Trading LLC, a Maui, Hawaii-based stock market advisory service. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Hayes appreciates your feedback; click here to send him an email.