StockWatch (Mar 26-30, 2007) : MERB, MEG, UPM, MIC, AEV

MERB (Chart: Daily Resistance: 62/73-75 Support: 67.50)

MERB looks as if forming a symmetrical triangle. MACD looks as if it is about to cross over, but all of this is just “looks as if”. Watch out for resistance at 73, if price breaks out, target price is around 85. The breakout has to have a big volume as it has to struggle on its upward move because of the resistance along the way up. Recommendation: Buy only on break out. Watch out for resistance levels 75, 78, 80

MEG (Chart: Daily Resistance: 3.30 Support: 3.10/2.95)

MEG is forming an ascending triangle. A gap up with high volume happened last Thursday which suggests the stocks strength. MACD has slightly crossed above signal line. The resistance at 3.30 needs to be broken with high volume, otherwise if there was no volume, the movement might be stopped by another resistance at 3.45 and may probably move back in the triangle. Recommendation: Buy on breakout only. The price movement is very near the apex of the ascending triangle, there is still a high possibility that the formation might be invalidated. The target price is at 4.0. You can still buy this stock at 3.50-3.60 level for a substantial gain if it does move with volume. Volume needs to be higher than 100M trades.

UPM (Chart: Daily Resistance: 0.80 Support: 0.69)

UPM is forming a symmetrical triangle. But it currently needs to break out from the 65 day MA. This stock still has a long way to go before breaking out. One good sign though is the MACD crossing over signal line and the upcoming cross above the zero line. Let’s see what would happen in a couple of days. This stock could either move above 65 day MA or trade the range within the 65 day MA and the support line.

MIC (Chart: Daily Resistance: 2.50 Support: 1.58)

MIC is also forming a symmetrical triangle. At this point, the price may still trade the range. If price does break out of the area pattern, target price is 4.80. Recommendation: Buy only on break out. Buying at this level might be costly as price may still move either sideways or downwards.

AEV( Chart : Daily Resistance: 8.30 Support: 7.80)

AEV is forming a descending triangle. Price movement has respected the resistance line on 2 occasions and on the last 2 trading days; AEV touched resistance for the third time at 8.40 and fell back. At this point, the price movement is squeezed by the resistance line and the 65 day MA. Price may either move sideways if the 65 day MA would hold, otherwise the price may move further down, re-testing support at 7.80 or 7.70. If the descending triangle holds and price breaks down, price may move further down to 6.0 level. Watch out for support at 7.20, the long term support, the 130 and 260 day MA on its way down.