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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 uBid.com Holdings, Inc. (OTCBB: UBHI). UBHI is reversing a long-term down-trend into 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 well above the 25% threshold line, indicating the up-trend in UBHI is strong enough to be sustained over a long period of time.
MAUG was trendless for most of the past year. However, in mid-June, MAUG was trading just under 0.04 when it exploded to the upside all of a sudden. Within a week, MAUG hit a high of 0.18. This was a big percentage move in a short period of time. Normally, a move this strong up and away from the 200-day moving average indicates that this is likely to be a longer-term up-trend.
UBHI spent most of the past year in a long-term down-trend, and was making lower highs and lower lows below a declining 200-day moving average. However, in early May, UBHI found support at the 0.60 level, and reversed direction back up. Last Thursday, UBHI hit a new 52-week high of 3.25.
With a move this strong, UBHI has now distanced itself from its 200-day moving average by quite a bit, indicating that there could be a long-term big move underway here. It also means that when UBHI does pull back, the pull back is likely to be slow and mild, and short-lived. It also means the next pullback in UBHI is likely to end well above the most recent low of 1.72, made on June 30th. On the other hand, if UBHI starts to correct and continues to correct and closes below 1.72, it will indicate the up-trend has reversed and that the stock is most likely going back to its 200-day moving average.
The strong move up from 0.60 to 3.25 is intriguing enough to keep UBHI on your radar screen. Whether or not a buy opportunity materializes in this stock remains to be seen.
Tony Golan
Chief Technical Analyst
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