GCOM

[PerfectSage]

GCOM has a ton of support underneath now. The typical stock breaking out of a long trading range will run up for a couple weeks then retest an old high and then bounce off it. In GCOM's case $7.58    Kind of like what END is/should be doing now.

GCOM weekly chart:

[Terliso]

One to watch...


Globecomm Gets Afghan Army Contract
Friday September 22, 2:50 pm ET 
Globecomm Wins $2.7 Million Contract Modification to Provide Support to Afghan Army Network


HAUPPAUGE, N.Y. (AP) -- Globecomm Systems Inc., a provider of satellite-based communications services, said Friday it received a contract modification worth $2.7 million to support a communication network for the Afghan National Army.
On Sept. 12, 2005, Globecomm announced a $7.4 million contract, through DasNet Corp., to provide all the equipment and personnel necessary to support a communications network for the ANA, allowing communications with the Afghan Ministry of Defense.

The contract included options, some of which have now been exercised, and some of which have yet to be exercised for three more years of follow-on-support.

The contract is fully funded by the U.S. government.

[Terliso]

Globecomm Systems in Afghan Contract
Thursday October 5, 3:11 pm ET 
Globecomm Systems Subsidiary Gets $2.1 Million Contract Extension From Afghan Telecom


HAUPPAUGE, N.Y. (AP) -- Globecomm Systems Inc., a provider of satellite-based communications services, said Thursday Afghan Telecom Corp. awarded a subsidiary a contract extension valued at $2.1 million.
Globecomm Systems and its partners design, install and maintain communications networks for Afghan Telecom.

Shares jumped 55 cents, or 6.5 percent, to $9.05 in afternoon trading on the Nasdaq

[basonista]

Time to update this thread.

GCOM looks to be champing at the bit for a breakout to new highs...

[Samantha Stephens]

Hi! I'm still trying to figure out all the charting stuffs. Can you give me a quick lesson?
How do you know this is going to new highs ... and isn't creating a double top? I can see both coming ... and that indecision is keeping me on the sidelines. Is there a confirmation that pushes you in one direction or the other? THANKS!!!
-Samantha

[basonista]

Hi! I'm still trying to figure out all the charting stuffs. Can you give me a quick lesson?
How do you know this is going to new highs ... and isn't creating a double top? I can see both coming ... and that indecision is keeping me on the sidelines. Is there a confirmation that pushes you in one direction or the other? THANKS!!!
-Samantha

Samantha,
First let me say that I don't know if this will go to new highs or not.  The best we can do is analyze the chart and the company to gain an informed decision and then if the stock price acts "correctly" we can buy or short it, letting the price action tell us what our moves should be.  Just so you know, I hold no position in most of the stocks that I post - I'm just pointing out potential plays for anyone interested.  That's not to say that I won't open a position at some point but stocks like GCOM are already in one of my watchlists or show up in a scan and look interesting for some reason.

To better explain what I see in GCOM's chart, here is a shorter term chart with some indicators added in:



The most obvious feature is how it is hitting resistance around the $9.50 area.  You are correct in that this could end up being a double top of the Eve and Adam variety.  If GCOM fails to break out above this level then a break below the $8.40 low of the valley would serve as confirmation.  That is when a more conservative approach would dictate a short position.  A more aggressive short position could be opened at this level with a stop above the recent $9.70 high.  Although I don't recommend it, risk would be minimal with the aggressive position and the reward could be pretty good.  I don't recommend it because the markets are still moving up and the trend for GCOM is still up also.  I wouldn't go long here either.  Personally, if I were to open a long position in GCOM, it would probably be at the ascending trendline although that is also a more aggressive strategy than waiting for an upside breakout.

Here is what I like about the chart and the reasons that I think this is a good watchlist candidate:
1. After the "Eve" part of this developing double top, price came down to retest the ascending trendline and rebounded with nice volume (this marked the low of the valley).  GCOM again retested the ascending TL the week before last and again moved up on higher volume.  The stock has now turned into the beginnings of an ascending triangle although it's not as well defined as what AMD is showing.  Ideally, we would like to see this bounce off ascending support again before it breaks out to the upside (if it happens).

2.  The ascending trendline has served as support since early August.  You like to see a stock honor it's support areas and the fact that GCOM successfully tested this trendline in September and again this month shows that the stock is "acting" correctly - traders are using that ascending support as their buy points  Now we also have the 50ma moving up along with this ascending support, making double support.

3.  Volume has been higher than normal since this move began in August with the up days moving on significantly higher volume than the down days.

4. RSI is at a lower point than it was when price was previously at this level.  That tells me that there may be some upside left instead of the RSI looking overbought.  MACD has also turned positive and looks like it has some room to run.

What I don't like about the chart:
1.  This is a low volume stock.  I normally wouldn't trade a stock with such low volume but I do on occasion and actually have a position in FSYS now - another low volume stock.  Volume has also been on the decline since the beginning of this move.  That is OK if you are talking about some sort of continuation pattern such as a trangle or bull flag but not usually during such an extended move such as this.  It doesn't feel like such a big deal here though.

2. This stock has moved alot already since August and may not have too much upside left in it.  Again, let the chart tell you what it wants to do.  Also realizing that the markets have had a very long up move with no correction and I get nervious about opening any long position unless I am really sure about the chart.  It is looking like more money is flowing into speculative stocks now so maybe this is one of them.

3.  For anyone that use the Stochastics, they are showing overbought and are turning down.  I use these as a confirming indicator but use RSI and MACD more for helping with decision making.

It's good that indecision is keeping you on the sidelines in regards to GCOM.  It is still deciding what to do and really could go either way.  Like they say, "Buy the breakout, sell the breakdown."  If I held a position now I would look to sell on a break of the ascending trendline/50ma support.  And if I was looking to open a position, it would be on either a retest of ascending support (more aggressive, low risk) or on a breakout of resistance with volume (less aggressive, low risk).  This chart just "feels" like it wants to move to the upside but taking a position before either the retest or breakout happens is too risky for me.

I'm sure I told you more than you wanted to know but it was good for me to actually write down all of my thoughts on the stock as kind of justification for posting it in the first place.

Good luck with your trades!

[Samantha Stephens]

applaud
The quality of your explanation is wonderful. I'm trying so hard to pick up all the charts and the candles. It's a lot to absorb, but I can't WAIT till someone asks me about a post and I can give them that kind of response. The people on this site, like yourself, make this far less intimidating than it should be and I really appreciate every tidbit I can get!!!

Thank you so much... I'll keep an eye on it.
-Samantha

[basonista]

So much for GCOM and champing at the bit for a breakout!  Breakdown is more like it.  This would probably be a good short on the retest of the ascending support now resistance but this is such a low volume stock that I wouldn't risk it myself.  That and the fact that volume on this pullback and support break isn't very heavy so isn't confirming that people are bailing out.  That is a pretty steep trendline so it's possible that GCOM will look for support somewhere else.  As mentioned above, a break below $8.40 will confirm the Eve and Adam double top and will put a price target of $7.75 in play - highest top (9.70) minus valley low (8.40) divided by 2 = .65.  Valley low (8.40) minus previous result (.65) equals 7.75.

The aggressive trade would be to short the retest of the ascending trendline.

The conservative trade would be to short the break of the valley low with the above price target in play.

I'll be watching from the sidelines. 

[basonista]

applaud
The quality of your explanation is wonderful. I'm trying so hard to pick up all the charts and the candles. It's a lot to absorb, but I can't WAIT till someone asks me about a post and I can give them that kind of response. The people on this site, like yourself, make this far less intimidating than it should be and I really appreciate every tidbit I can get!!!

Thank you so much... I'll keep an eye on it.
-Samantha

Thanks, Samantha!  It has taken me a lot of hard work to get to the point where I can get even a little information out of a chart let alone be able to evaluate a chart like GCOM in such a way.  Obviously, I was wrong about it wanting to breakout to the upside but that is why the best trades are on the breakout or breakdown.  A lot of the time, getting into a stock before it has decided what it wants to do is gambling.  But taking that risk with a plan can make for some pretty nice trades with proper timing. 

I have to tell you that when I first started trading, I scoured the internet looking for help and learning as much as I could.  To this day, I don't think there is better than 3sof and the people that bless us with their wisdom and guidance.  David, Rams, Melf, SE and so many others really make this a special place.  And one that I hope to be a part of for a very long time.

[Terliso]

Just like David says, "forget the short-term noise"    

lesson learned.