|
|
|
home » small cap highlights
Tony Golan
Chief Technical Analyst
StockProfit.com™
 Zoom
This week I chose to highlight the chart of Neoprobe Corporation (OTCBB: NEOP). NEOP is starting a powerful new long-term up-trend. The stock is making higher highs and higher lows above a rising 200-day moving average (the red line on the chart above). Relative Strength Differential (RSD), our proprietary indicator for selecting stock in super-strong up-trends, is way above the 25% threshold line, indicating NEOP is far outperforming the S&P 500 and should therefore continue trending higher.
NEOP spent much of the past year in a long-term sideways trend, swinging above and below the 200-day moving average without sustaining a clear direction for very long. However, in late March NEOP hit a low of 0.32 right at the 200-day moving average and turned up. Last week, NEOP hit a new high of $0.84.
Needless to say, when a stock goes from $0.16 to $0.89 in four months without any corrections to speak of, it is overextended. As such, it is not a good time to start new positions. Right now a much better strategy would be to wait and see how the stock corrects when it corrects.
Unlike some of the other stocks we feature here, NEOP has had a 3-day pullback off a high and made a low at 0.445 in late April, so if NEOP now declines below 0.445 it will invalidate the up-trend and reverse back into an intermediate-term down-trend.
Since NEOP would now have to decline close to 50% before we find out the trend reversed, it would not make sense to establish new positions in NEOP right now. Like all other stocks making new highs, risk can be much better controlled by waiting for the stock to complete a slow, mild correction against the trend, then turn up, before establishing a position. Until then, impatience could be costly.
Until then, keep NEOP on your radar screen. It has trended up nicely and shown high relative strength.
Tony Golan
Chief Technical Analyst
Disclaimer: Copyright© 2008 StockProfit™. All rights reserved. StockProfit™ is an independent electronic publication providing information on select public companies. StockProfit™ is not a registered investment advisor or broker-dealer. There is a risk of loss in all of trading. Past performance is no indication nor guarantee of future results. The information contained herein is believed to be accurate.This update is provided as an information service only, and the statements and opinions in this update should not be construed as an offer or solicitation to buy or sell any security. In no event shall StockProfit™ and/or its publisher, P.A. Relations or any of its employees or affiliates, be liable for any direct, incidental, consequential, indirect or punitive damages whatsoever arising out of the use of the Information, or for any errors or omissions in the content thereof, including, but not limited to, from any investment loss, damage or expense incurred by any investor resulting from the Information, or from the purchase or sale of any profiled company or any company which we make commentary. We recommend using good-'till-cancelled stop orders to minimize losses in the event of an adverse price movement. We have not been compensated by company(ies) mentioned above in any way. We do not hold any positions whatsoever in the above mentioned company(ies).
|
|
