(By Rich Bieglmeier) As we head into another week of trading, iStock journeyed through the charts for all the NASDAQ 100 members. By examining each issue, we can get a sense of which way the index might be headed in the week ahead, and by default, stocks in general.
As we walked through the candlesticks, we found many, many companies in limbo with a little more than half in a downtrend, but between support and resistance. However, we could only identify one company with an outright sell-signal, Warner Chilcott plc (WCRX).
The specialty pharmaceutical company's shares hit a new cycle-low on Friday, and history shows that new lowers are typically followed by fresh, lower lows. iStock can see a bearish MACD cross-under on its chart and the stock testing its 52-week low.
On the other hand, five companies show promise for the upcoming trading week.
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Check Point Software Technologies Ltd. (CHKP) marched a little higher in the last week, all on volume that increased day-after-day. Shares bypassed their 50-day moving averages and pulled the 12-day and 26-day averages above the key trend-line, too. Last week's gains moved the stock through an upper guardrail of resistance that connected descending pivot-tops. The breakthrough is a bullish sign of potential gains to come.
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Flextronics International Ltd. (FLEX) is another that made its way through a descending trend-line of resistance. However, the stock has curled back slightly. If the stock can stay on the better side of its 50-day average of $5.90, then it should resume its advance of the floor, especially with the 12-day and 26-day beginning to turn higher.
Life Technologies Corporation (LIFE) has been bobbing along its 50-day average since the middle of November. Last week, shares may have committed to going higher and pulling away from the magnet. As the stock's moved up, so has volume. If the global life sciences company can get on top of its 52-week high of $51.47, it could be off to the $56ish or beyond.
A host of semiconductor charts are showing signs of improving health and prices, which fits with growth forcefully entering our sector performance review last week; although, the sector didn't make either bull list. Xilinx Inc. (XLNX), however, makes our list for the week ahead.
After hitting a cycle low at the end of October, the integrated circuits company is stepping up with a series of higher pivot-highs, following higher pivot-lows. This is the definition of an uptrend. With its relative strength improving, we believe the stock can make a run at its 52-week high of $37.74.
Of course, events, news, the fiscal cliff… will drive stock prices in the week ahead. Many of the in limbo stocks will move closer to their support and resistance levels in the days ahead, and that's why you should check with us multiple times a day.