Chiradeep BasuMallick recently identified four risky stocks that could have big rallies in the year ahead. These stocks are not household names, so we want to check the charts and indicators to balance the risk and rewards on Centrus Energy (LEU) , Corbus Pharmaceuticals (CRBP) , Live Ventures (LIVE) and Pershing Gold (PGLC) .
In the one-year daily bar chart of LEU above, we can see two impressive parabolic rallies in the past 12 months. In between these two rallies was a seven-month consolidation. Prices are above the rising 50-day and 200-day moving averages. Because of scaling, volume is hard to read. The on-balance volume line is easier to read and goes up sharply on the first rally in March and has remained steady the rest of the year. The moving average convergence/divergence oscillator has been above the zero line for much of the year and earlier this month signaled a take-profits sell.
In the three-year weekly chart of LEU above, we changed the scaling to a "log" chart because of the big range. The price action of the past two years shows a base pattern that could support further gains.
In the daily chart of CRBP above, we can see that the stock has done extremely well the past 12 months. Prices have been correcting the big run-up into October the past three months. Prices are above the 50-day moving average line, but its slope has turned down. CRBP is above the rising 200-day line. The OBV line has been positive, rising through the year and telling us that buyers have been more aggressive. The MACD oscillator turned bullish in mid-November.
In the weekly chart of CRBP above, we can see a large base pattern below $4. Prices are above the strongly rising 40-week moving average line. The weekly OBV line has been rising since August. The weekly MACD oscillator recently moved to a new buy signal.
In the one-year daily chart of LIVE above, we can see how the shares exploded upward from a "line" pattern (a pattern where prices stay in a tight range). November was the turning point where prices held above the rising 50-day and 200-day moving averages. The OBV line turned more positive in September, and the trend-following MACD oscillator turned positive in November. Prices are very extended, so a correction and a higher low are needed before trying to approach the long side.
In the weekly chart of LIVE above, we can see how prices turned up above the rising 40-week moving average line. Resistance above the market is old and probably not meaningful. The OBV line is positive as well as the MACD oscillator. Taking a multiple from the $10 base, I would look for longer-term gains to $30 or even $40 in the months ahead. A good stop-loss point will be the key between winners and losers.
Finally, in the daily chart of PGLC above, we can see that prices have worked lower in recent months as the price of gold has declined. A bearish death cross of the 50-day and the 200-day moving averages can be seen at the end of November. The OBV line peaked in July with prices. On the plus side, the 12-day momentum study has been making higher lows since November, telling us that the decline has slowed.
In the weekly chart of PGLC, we can see that prices are below the declining 40-week moving average line, but we could be looking at a large double-bottom pattern. The weekly OBV line is pointed down with prices, and the MACD oscillator is bearish. PGLC could have a short-term bounce in the next couple of weeks, but a sustained rally is probably months off in the latter part of 2017.
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