A small basket of popular stocks attract the vast majority of coverage in the financial media, while a universe of hard-working companies goes relatively unnoticed and unloved, despite strong fundamentals and equally strong technical patterns.
with seven bull-market stocks you've never heard of.
makes core materials for the semiconductor industry. It bottomed out at $0.68 in 2009 and entered a strong uptrend that eased into a rising channel in May of this year after the stock posted a two-year high. It's still grinding higher in that pattern nearly three months later.
Support at $4.25 and resistance at $5.50 define the boundaries of this stable uptrend. The stock reversed at the channel high on Tuesday, so it may not be the best time to get on board. But watch closely, because recent price action is generating enough momentum to trigger a channel break and a fast rally up to the 2008 high at $7.20.
Superior Well Services
( SWSI) builds equipment for oil and natural gas explorers. It broke down from a massive double top pattern at $17 in late 2008 and plunged to an all-time low at $4.11. It entered a new uptrend in 2009 and returned to resistance in January of this year. The stock ground sideways for the next six months and broke out last week.
This buying spike is significant because it sets up the right conditions for a strong uptrend that eventually reaches the 2008 high near $36. In other words, this stock might offer a "double" to investors in the next three to six months. The easiest trade entry will come on a pullback to new support near $18.
( MIPS) is a Sunnyvale-based semiconductor company that specializes in home entertainment devices. It sold off from $10 to $1 during the bear market before entering a persistent recovery. It's now trading near the midpoint of the 2008-09 decline in a channeled uptrend.
The rally topped out with the broad market in April, with the stock pulling back and testing the 50-day moving average four times in the last three months. It has now built a broad triangle pattern, with resistance between $5.50 and $6. A breakout should support a renewed uptrend that reaches 2007 resistance between $7.50 and $8.
is a wireless telecomm provider in, you guessed it, the state of Alaska. The weekly chart tells the tale here, with a long downtrend that bottomed out in early 2009 followed by a fast rally that ended at $9.41 in September. The stock then pulled back in a series of dips that have carved out a cup-and-handle pattern.
Underlying accumulation is much stronger than the price bars, marking a bullish divergence that points to higher prices. The stock has slowly wound its way up to resistance at the 2009 high and is now trading just a few cents above that level. A breakout should resume the uptrend, with a target at September 2008 high near $14.
is a small-cap biotech that focuses its efforts on viral and infectious diseases. The stock hit an all-time low at $1.86 in March 2009 and tested that level successfully in November. The subsequent uptrend has shown steady progress, with price now trading near a 17-month high.
The stock eased into a stair-step pattern in June, with quick bursts to new highs followed by extended profit-taking. Price is now testing support near $5.10 and could start another upswing in the next week. The next breakout could reach $6.75 to $7, where 2009 resistance might slow the upside once again.
is a "green" company that manufactures a wide variety of Earth-friendly bioplastics. The stock built a two-year basing pattern at $13.50 and broke out in May of this year. The uptick hit $17.12 a few days later and stalled, giving way to a two-month consolidation pattern with support at the breakout level.
Price ticked up to a two-year high this week, confirming the breakout and setting the stage for a renewed rally wave. The upside could be substantial, given strong accumulation and growing momentum. My initial target lies at $20, which marks resistance at a topping pattern broken at the start of 2008.
is a specialty insurance underwriter based in Michigan. This was a hot stock through the middle of the decade, rising from $1.50 to $12.48 and topping out in 2006. It then entered a long downtrend that finally ended in late 2008. The subsequent rally has the stock now trading near a two-year high.
The stock has had a tough time since it struck a new high at $8.90 (red line) in mid-May. In fact, it's crisscrossed that price level more than a dozen times in the last two months. The good news is, it looks like these whipsaws are finally easing up, ahead of a strong rally that lifts price into double digits.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Alaska Communications, AXT Inc., Idenix Pharmaceuticals, Meadowbook Insurance, Metabolix and MIPS Technologies 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.
Alan Farley provides daily stock picks and commentary with his "Daily Swing Trade" newsletter.
At the time of publication, Farley had no positions in the stocks mentioned, although holdings can change at any time.
Alan Farley is a private trader and publisher of
Hard Right Edge
, a comprehensive resource for trader education, technical analysis, and short-term trading techniques. He is also the author of
, a premium product from TheStreet.com that outlines his charts and analysis. Farley has also been featured in
. He has written two books:
, due out in April. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.
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