Friday, July 09, 2010

Stock to Watch: Satcon Technology Corp (SATC)

With Futures suggesting a mixed Friday in preperation for next week's earnings season and last night's breakout scan drawing a blank I took a look at previous breakout candidates to find a stock which is behaving well. One which caught the eye was Satcon Technology Corp, SATC.

The stock featured twice in a past breakout scan; first on June 25th and again on June 28th when it closed at $2.99 and $3.08 respectively. The stock has since converged into a bullish wedge which has held above prior trading range resistance of $2.90 (it closed yesterday at $2.90). The top-end of the 2010 range is $2.93 but if the stock is to push on it will have to make its move over the next couple of days. A confirmed move higher will require a close above $3.00 on volume, otherwise a close below $2.75 would negate the bullish implications of the wedge pattern.

Zignals Chart Image

Analysts have placed a 1-year price estimate of $3.71 with two recommending a 'buy' and three a 'hold'. MDB Capital Group recently placed a target of $4.00 (from June 4th). The technical target is around $3.90 based on the height of the 'pole' from June lows to June highs - projected forward from the current trading pattern.

A SeekingAlpha blogger, Daniel Long, had this to say:

SATC's balance sheet is not the greatest, but certainly sustainable. On June 17, the company added 12 million to its short term debt load. It has seen a little bit of quarterly revenue growth and has consistently shown a gross profit. Recently the company has announced several deals, and has introduced a few new products. This combined with some insider buying via stock options at around $2.25 may bode well for the stock in the short-to-mid-term

Perhaps one for a quiet market? Why not set a Zignals Stock Alert for a break of $3.00 or $2.75 on volume.

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