Harry Boxer

Three Top Charts to Watch
Article by Harry Boxer, TheTechTrader.com

Our Charts of the Week this week focus on stocks in the agriculture and energy arena.

The first is Agfeed Industries (FEED), which is certainly looking terrific with a 1.20 gain on Friday in the face of an ugly declining market, with phenomenal relative technical strength. A look at the daily chart shows the stock, which had broken out of the base and backed and filled last month, broke down mid-week last week slightly below the 21 DMA, but held the 40 and held the lateral price support, and for the rest of the week bounced sharply and closed at the highest level since last October.

At this point it sure looks like it's going to moving up towards that 16-16 1/4 area for a test over the next couple days unless we get a really negative decline on the day. The technicals, which had fallen back rather sharply, reversed just as sharply and are now near the highs with a very strong volume day of 1.14 million on Friday. This one augurs well for future price performance.

Our next Chart of the Week is Georesources (GEOI), which has had a spectacular move in the last three weeks or so. The daily chart had been developing very nicely with a base pattern breakout in October and a consolidation period into early this year. A nominal breakout in early January was thwarted by the market decline, but it quickly recovered and moved from 8 to more than 17, about 17.69 on Friday, which is the multi-year high. The significance of that is that the 2005 double-top came right in this range, so a breakout from this area could really explode the stock higher.

The company is a product of a merger of two companies recently and is much stronger than it was in prior years in terms of its financials. They've had a big ramp-up in revenues and sales of their products. This stock looks to me like a real emerging natural resource company. It's a little ahead of itself short-term, and we may see pullbacks. I'd be looking to enter this stock somewhere in the 14 1/2-15 zone on any pullback, particularly if it came on low volume.

Don't forget this is a stock that's up from about 6 -- nearly a triple -- since the August lows, so it's due for a rest. But if it does spurt here and explodes it could move higher. The company has very interesting properties in Montana and North Dakota. That's a very big area, particularly the Bakken basin reserves, which recently were discovered to be the largest in the United. So Georesources is one to continue to keep an eye on, and we'll be doing so over the next few weeks. Short-term target at around the 19 1/2-20 zone, secondary target at 25, and then longer-temr target at 32-.32 area.

Our third and final Chart of the Week is Northern Oil & Gas (NOG), another energy play, also in the hot Bakken region in the Montana/North Dakota area. This is also a new issue, and the reason I'm showing the 15-minute chart is there is not that much history. Looking at the daily chart, there's only several days of information. It got listed in the 7 range, went sideways for a few days, and then exploded on that news of an additional discovery in that area from just under 7 to just under 10 (the 9 3/4 area), and dropped back sharply but held the 8.25-.30 zone, bounced on Friday sharply and gained 33 cents in a very poor, declining market.

A look at the 15-minute chart shows that the move encompassed a move up, flag, another move up and flag, and then it did it again. It pulled back and then spiked up on Thursday morning before backing off sharply in the afternoon but holding its reaction low from Wednesday morning. It bounced back up to resistance and now is forming a kind of mini base. If it gets back up through the 9.20 area, it can see an extension of this rally, and I'm expecting that. Again, support around the 8.30 area, resistance around 9.20, and a breakout either way could have a dramatic effect on this stock, but I'm expecting further upside extension to get this to the 10-11 zone short-term.

If it does spike up through 9 3/4, you could see quite a big run on it and this may be just the beginning of that move, as volume has increased steadily on that move up.

Harry Boxer is author of The Technical Trader (www.thetechtrader.com), a diary of his swing and intermediate-term trading ideas and technical market analysis, including 3-4 Top Charts of the Week with video chart presentation. He does not have personal positions in stocks mentioned in this article. Sign up for a Free Trial to Harry's Charts of the Week.