Technical analysis: rocket pattern

I mentioned the “rocket pattern” in the previous post about Huron (HURN). So what is a “rocket” (in TA) anyway ?

A “rocket” consists of a “rocket launch” (a day with a huge jump up in the stock price, due to a very significant news that changes the prospects of the company completely and that takes a long period of time to fully play out), followed by a robust up-trend during the following months.

In order to have a “rocket”, the news must be really outstanding and its impact long-lasting.

Here is an example:

qcom_1999

Another example:

orcl1999

So what about HURN ?

hurn_1y_120090818

There is a big difference between HURN and the above pictures of ORCL (Oracle) and QCOM (Qualcomm): ORCL and QCOM were making new highs, HURN is not. HURN is trying to recover from a crash happened less than a month ago, and it has lots of angry investors, lots of things to overcome. Nevertheless, there may be some similarities, namely: undervaluedness, and more confidence in the stock (lower perceived risk, better prospects) after the D-day The road of recovery of HURN will be long, but with a forward P/E under 10 (even after today’s runup) and reasonable growth prospects, the chances of HURN regaining some more ground during the next 12 months are reasonably high.

Print Friendly

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

  

  

  

This blog is kept spam free by WP-SpamFree.