This column was originally published on RealMoney on June 7 at 10 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please
Ceragon Networks ( CRNT) is a network management company located in Israel. The stock gapped over four-month resistance at $6 in late April and took off in a vertical rally. The move reached $10.44 this week, with price dipping down in a long-legged hammer during Wednesday's selloff. This hammer is considered bullish but its location suggests the rally has ended for now. If so, look for price to move into a sideways pattern while the stock tests round-number resistance at $10. This process could take two to three weeks. The good news is a solid base at this level should set up a follow-through rally that reaches into the mid teens.
ENGlobal ( ENG) provides engineering services to the oil and gas industry. The stock hit $15.20 in 2006 and entered a deep correction. It finally found support in March near $5 and began a strong recovery rally. Price reached $11 two weeks ago and dropped into a narrow triangle pattern. This is setting up nicely for a momentum burst that should carry the stock back into its 2006 high. The triangle continues to tighten up, suggesting the new uptrend will begin with a wide-range rally bar. That move alone could add 2 points to the current price in a single session. The rally could unfold quickly, so get this one onto your watch lists.
Premier Exhibitions ( PRXI) is the company behind the "Bodies" human remains exhibits, as well as owners of artifacts of the Titanic. The stock has been in a steady uptrend since 2003. Rally momentum has expanded greatly in 2007, with the popularity of its unique assets attracting a worldwide audience. The last rally leg stalled in April. Price spent the next two months bouncing along a rising highs trend line, before breaking out on strong volume earlier this week. Fortunately, there's no need to chase the uptrend to get on board this unique play. Instead, I'd wait for a pullback that tests support at $15. An entry there could enjoy a rally up to $20 this summer.
Medtox Scientific ( MTOX) diagnostic products test employees and criminal suspects for illegal drug and alcohol use. The stock is currently trading near an 11-year high. Its strong rally ran out of gas three weeks ago near $28. Price has been moving sideways to lower since that time. It looks like the pattern is setting up for a test at the 50-day moving average near $23. A strong bounce at that level could complete the correction and start the next leg of its uptrend. There's no rush to enter here. Instead, sit back and wait for buyers to show up near the lows. That should offer plenty of time to build positions for a breakout over $28.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Transcend Services, Ceragon Networks, Englobal, Premier Exhibitions and Premier Exhibitions 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.