2. Next is Westport Innovations, which provides low-emission engine and fuel system technologies utilizing gaseous fuels. The company's technology and products enable light, medium, heavy-duty, and high horsepower petroleum-based fuel engines to use primarily natural gas and alternative fuels. It designs, manufactures, and sells compressed natural gas, liquefied petroleum gas and liquefied natural gas (LNG) components and subsystems to original equipment manufacturers.
Westport traded big on Friday, closing up 24.28% to $16.07 per share.
- Friday's range: 13.50 - 16.25
- 52-week range: 12.42 - 35.40
- Friday's volume: 7,007,245
- 3-month average volume: 1,182,200
Westport is in a "rounded bottom breakout" pattern. Rounded bottoms can be very profitable, that's why I trade them so often. The tricky part is, by default, the chart needs to be in a downtrend. So as with all chart patterns, we'll need confirmation. I can't say this enough! Westport had a big day on Friday, closing above the 50-day simple moving average, above near-term resistance, with exceptional volume. Today we need to see continued strength and interest. I'd like to have an entry inside Friday's candle, somewhere between $15.15 and $16.00.
There is resistance at Friday's high of $16.25, then again at $17.45-ish, and then again at around $19.00. The first target is the 200-day simple moving average at $21.32, which will be a 32% upswing. I'd set a stop just below the 50-day simple moving average at $15.07. Today, we will likely see a little pullback for a better entry. I would buy on any positive trading today. Stay long until you see a sell signal or a close below the t-line (8 EMA) with follow-through.
3. Next, let's look at Alpha Natural Resources. The company, together with its subsidiaries, is engaged in extracting, processing and marketing thermal and metallurgical coal in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming.
Alpha Natural Resources traded positive on Friday, closing up 2.21% to $4.63 per share.
- Friday's range: 4.50 - 4.73
- 52-week range: 4.12 - 8.30
- Friday's volume: 11,093,158
- 3-month average volume: 12,387,500
I am long Alpha Natural Resources. I bought a starter position on Friday, when shares traded over the 50-day simple moving average. ANR is a rounded bottom breakout, and that is why I only bought a starter position. I need to see confirmation today.
To start, I only buy one-quarter of what I am willing to spend on a trade. Then on strength, I'll add to the position, one-quarter of my full intended position at a time.
Alpha Natural Resources formed a double-bottom over the last month and a half. Some call it a "W" pattern. But we haven't reached the breakout level yet. That level is at $4.88. Some traders buy on the breakout, some want it at the bottom. I like to enter somewhere in the middle.
There is overhead resistance at $4.88, $5.09, $5.24 and $5.58, so watch for consolidation at these levels. Target the 200-day simple moving average at $5.85, which is a 26.28% move from Friday's close. Stay long until you see a confirmed sell signal or a close below the t-line (8 EMA).
Good luck traders, as luck favors the prepared!
"People somehow think you must buy at the bottom and sell at the top. That's nonsense. The ideas to buy when probability is greatest that the market is going to advance."
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At the time of publication, the author was long ANR but held no positions in any of the other stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.