Thursday, July 31, 2008

Compuware Corp (CPWR)

In light of what looks to be a developing sideways pattern in the market I have instead for today a stock to watch. Compuware Corp (CPWR) had featured as a newsletter pick for May 19th, and as a free pick for July 21st. It has risen 25% since May and 9% since mid-July and the current 5-day handle looks a good place to raise the prior stop price. I would also set a free stock alert for a price cross above $11.23 as this should see a run to resistance on the weekly chart:


The chart shows good volume behaviour with rising volume in the advances and falling volume for declines/sideway action. There may be some concern with the lower volume for the push from $9.24 to $11.21 compared to from $6.97 to $10.42 - but a protective stop would provide the necessary protection.


Lovely cup-and-handle on the weekly chart with great relative strength with respect to the S&P:


Point-n-figure chart is still running from the May 16th Double Top Breakout with target of $19.50.

Option buyers can look to the January 2010 $5 strike calls going for $6.80 from the ask. This is a $0.70 time premium with almost double leverage. Compare that to the $0.25 ask price for a $12.50 strike expiring this September.


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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