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:


Another example:


So what about HURN ?


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.

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