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home » small cap highlights
Tony Golan
Chief Technical Analyst
StockProfit.com™
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This week I chose to highlight the chart of New Century Energy Corp. (OTCBB: NCEY). NCEY is starting what appears to be a strong new long-term up-trend. The stock is now 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 far above the 25% threshold line, indicating NCEY is very strong and should therefore continue to outperform the S&P 500.
NCEY spent much of the past year in a long-term down-trend, making lower highs and lower lows below a declining 200-day moving average. However, in late-May, NCEY hit a low of 0.032 below the 200-day moving average and turned back up sharply. Last Friday, NCEY hit a new high of 0.56.
The force of the up-move and its ability to quickly distance itself from the 200-day moving average indicates that the move in NCEY is just a pre-cursor to a much bigger, longer-term up-trend. However, if NCEY is going to sustain this up-trend over a long period of time, the next correction will be slow and mild and result in a higher low and a turn back up to resume the up-trend to more new highs.
On the other hand, if NCEY declines sharply and quickly when it does decline, chances are pretty good it won't be able to turn back up and rally to new highs, which will make the such a correction a poor place to enter NCEY.
So, keep an eye on NCEY in case it should develop such an entry point. The strength it has shown so far certainly merits it.
Tony Golan
Chief Technical Analyst
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