Critical Dow Parameters
By Joseph Granville, editor
The Granville Market Letter
Critical
Dow parameters are the 7719 intraday low of February 25th and
the February 13th intraday low of 7628.99. If those parameters
are broken, Dow will be exposed to a very sharp decline. Largely
insulated from any such break, subscribers should only be concentrated
in the recommended low-priced stocks. Be sure to obey all stop
loss levels.
Caliper Tech (Nasdaq
CALP 3.27). Almost a mathematically perfect long sloping curve
ending in a rounding bottom. The low was just made this past
week at 2.71. Here I would make a bet that the bottom has been
seen. If I am right, stock has a chance to make it back to 8.00
in 6 12 months. Place stop loss at 2.40. Buy.
Double Click (Nasdaq
DCLK 6.18). Formed a double bottom in July and October and that
was followed by a strong turn to the upside, which is definitely
still in force. Rising bottoms here are the key to technical
strength. The July-October was at 4.42 followed by higher bottoms
at 5.30 and 6.00. Anticipated breakout above the 7.50 level will
free the stock so that it can then advance to the 9.50 10.00
area. Buy July 7.50 calls. Stop loss is at 4.90. Buy.
Lexar Media (Nasdaq
LEXR 3.97). On the assumption that most October lows will hold,
this stock looks attractively oversold on its current pullback.
The stock bottomed at 1.70 in October. I think we have an easy
move back to 5.00 here and a later upswing to the 7 8 area. Place
stop loss at 2.30. Buy.
LTX (Nasdaq
LTXX 5.00). On the assumption that most October lows will not
be challenged, this stock looks exceptionally strong. It bottomed
at 3.12 in October and now appears ready to take out all upside
resistance levels and rally back to the 8.75 level. Buy the June
7.50 calls. Stop loss is at 3.90. Buy.
McDermott (Nasdaq
MDR 4.50). Bottomed at 2.34 in October. The initial run consisted
of one advancing phase and one pullback phase. Anticipated breakout
above 5.00 will then test the summer high at 7.00. Anything above
7.00 will see the stock starting its sliding pole advance, which
will take it to the 11.00 level. Place stop loss at 2.90. Buy.
Novavax (Nasdaq
NVAX 4.05). This stock generally shows a flat top and rising
bottoms, a combination that would in time call for major upside
breakout. Stock had bottomed at 1.59. An anticipated breakout
above the 4.75 5.00 area would put the stock at the base of its
sliding pole. That would then imply a sharp rise to the 9.00
level with some patience. Place stop loss at 2.50. Buy.
Editor's Note: Joseph
Granville is editor of The Granville Market Letter, P.O. Drawer
413006, Kansas City, MO 64141, 1 year, 46 issues, $250.
