Saturday, January 2, 2010

Chart Analysis for OCNF, TGB, and ULU

Uluru, OceanFreight, and Taseko Mines Limited are given a technical once-over.

Stocks are in the red today, as traders look to unload some holdings and come back to the new year with a clean slate. How's this affecting OceanFreight Inc. (NASDAQ:OCNF), Uluru Inc. (AMEX:ULU), and Taseko Mines Limited (USA) (AMEX:TGB)? Take a look - all three are at tremendous risk with this slight bearish headwind from the market (though even a bullish tide probably wouldn't save them).

I hate to be the bearer of bad news for current owners of
Uluru Inc. (AMEX:ULU), but yesterday's move to new multi-week highs was likely to be a one-off event. If you look just a little further back (as well as much further back) you can see that Wednesday's high of $0.299 was pretty much ion line with a key resistance level hit - and uncrossed- several times in recent months.

I showed you all this on our daily chart, which goes back to May. What I
show you was how Uluru Inc. has been dealing with a resistance 'zone' between $0.27 and $0.32 since February. The high volume we saw from ULU yesterday was a new phenomenon, but hasn't helped a bit. Why? Because today's selling volume is on pace to easily exceed yesterday's buying volume. In other words, there's some big-time profit-taking going on for Uluru.... more than you'd want to fight.

In short, I can see ULU sliding back all the way to the recent floor around $0.12, which has been in play since March. Considering such a move would cut Uluru Inc. shares in half from their current, I see the risk of even 'riding it out' as too great to deal with. Time to bail, in my opinion.

Taseko Mines Limited (USA) (AMEX:TGB) is starting to feel the excessive weight of its recent gains. As such, a fairly significant pullback may be in order. Actually, it looks like it's already started.

The problem is evident immediately after you look at the chart. TGB left the confines of a sustainable rally (framed by blue lines) and rallied to a peak of $4.45 a couple of weeks ago. Even when Taseko Mines Limited were in that bullish zone, they tended to fall back once stochastically overbought. It was surprising to see the chart stay as overbought as long as it did over the last three weeks too, but time has finally caught up with the stock.

Though not 'strong' by anybody's definition, the selling volume over the last three days for Taseko Mines hasn't been dismissible either. And, I suspect the more TGB falls, the more the sellers will come out of the woodwork; there's too much profit-taking potential on the table. One of two potential support lines could finally stop the bleeding, and I'd be willing to be it's the lower one... currently at $3.00 (but on the rise)

I had to zoom out to a weekly chart to really show the scope of the trouble OceanFreight Inc. (NASDAQ:OCNF) could now be in. Though it was worth giving up the daily of a daily chart, I still encourage you to take a look at the daily chart on your own... especially if you're going to trade it.

In short, OCNF is approaching a major line in the sand. Actually, there are two.... one at $0.92, and another at $0.89. Both have been floors for the stock at some points this year. More importantly, OceanFreight shares are once again pressing their luck on that front. After a string of lower highs, lower lows are only a hair away.

As for how to play it, here's a case where I'd wait for a stock to fall all the way under a support 'zone', just to be sure it's crumbling. In other words, wait for OceanFreight Inc. to reach $0.91 before pulling the trigger on a short trade (or bailing out, if you're long). I don't know where the tumble could stop for OCNF though - that you'll have to play by ear.

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