My long term stance on the current market is bullish. Therefore, I am inclined to giving greater importance to any bullish signals I see in a stock's chart.
Here is one interesting bullish setup that I wrote about on my blog before markets opened on Wednesday December 29th. (FTK is up 28% since I wrote about it).
Original post (published before open on Wednesday December 29th):
"Flotek Industries Inc. is a basic materials company. This sector is currently in a very bullish uptrend (take a look at my previous pick: Dynamic Materials Corp. for an analysis of this sector). To analyze this stock I am using an Ichimoku overlay on FTK's weekly chart as shown below.
NOTE: For details on Ichimoku Charts read Ichimoku Charts: An Introduction to Ichimoku Kinko Clouds.
FTK closed at $4.25 a share on Tuesday, December 28th. On the chart shown
above I have marked four regions where strong bullish formations are
Region 1: In early November FTK's price moved decisively above both the conversion line(blue) and the base line(red).
Also, during the same week after almost 3 years of trading the stock
broke above the Ichimoku cloud. This is a very bullish signal,
especially if the breakout occurs after a long period as in FTK's case.
Region 2: Since the cloud is shifted 26 days, it provides a glimpse of future
trends. On the chart above it can be seen that the cloud turns from red
to green indicating bullish moves in the future.
Region 3: This part is really important. It can be seen that all the above mentioned
technical formations were supported by huge trading volumes. High
amounts of volume makes breakouts more reliable.
Region 4: Finally the sharp upward turn in the stock's RSI is a strong indication of rapid bullish progress for the stock in the future.
FTK's daily chart is also showing some interesting formations.
Notice after the most recent upward rally, the stock is now trading in a
narrow symmetric trading range. A breakout above this range will mean
another bullish run. While a breakdown will indicate a short term
correction. So, the daily chart is also worth keeping an eye on.
To sum up I think FTK is presenting a good long term investment for a hold
period of six months to two years. Good sell points can be past
resistances and supports around $10.00 and $15.00. This can give a
decent 100% to 200% profit.
NOTE: One of my previous picks Geeknet Inc. (GKNT) is up 25% in just over a month. This can be a good sell point for short term traders.
That's it for today. Don't forget to subscribe for regular feeds."
This post was from Faizan's Stock Picks .
Just wanted to share it with you guys.