Harry Boxer & Mike Paulenoff

[thetechtrader]

From our Charts of the Day video last night...

Applied Signal Technology, Inc. (APSG), a stock I’ve been watching for a while, is starting to emerge and looks like it has a lot of promise here. The chart pattern shows that it’s been in a substantial downtrend from near the 27 range down to 17 over the last several months. The declining topsline was broken with a price-volume surge and breakaway gap a week ago. The stock pulled back in a nice little flag pattern and today popped 62 cents, or 3.2%, but came right up to overhead resistance from the April and June highs. A breakout may be occurring. Secondary resistance at 21.27 will be watched carefully for a more important breakout. If that occurs, I expect the stock to get up to the mid-20s short-term.

Arena Pharmaceuticals, Inc. (ARNA) had a nice snapback day, up 25 cents, or 6.9%, on 6.6 million shares. The OBV and Money Stream are making new highs, and the other technicals are improving. We’re up against the 4.00 lateral price resistance going back to November and December. A breakout from here could lead to a thrust that takes this stock up to my next trading target at the 5 1/2 – 6 zone to test the September highs.

Metropolitan Health Networks Inc. (MDF) has formed a nice rising channel, and over the last six or seven weeks has formed a really orderly pullback retracement flag-type pattern with good technicals during that process. That leads me to believe more upside is due, and my target is up around 5 1/2-3/4, or a couple points away from where we are now.

VIVUS Inc. (VVUS) had a big snapback in the last couple sessions. Big volume came into it yesterday, and a follow-through today took out the 50-day moving average as well as the declining topsline. Today was a significant day technically. It took out two key levels of overhead resistance with heavy volume. I’m looking for a follow-through that quickly gets up to 12 3/4, maybe as high as the 13.50-.65 zone. That’s the short-term target, but beyond that, if it blows through there, we could see something in the mid to maybe high teens.

More Charts of the Day in our video at http://www.thetechtrader.com/chartofday/7/2010/8/