EDC,FGEN,PCOR,SMB 3-17-2011

For the past few months, EDC has been tempting to break out of its 5.90 and 6.20 resistances and late last week, it successfully did. Currently, there is still a slight resistance on 6.25 to 6.30, but the crucial resistance of 6.20 has been already taken care of, so I think that this stock is already in the uptrend phase with target resistance standing at the old high of 6.50. The recent oil price hikes have minimal effect on EDC/FGEN since these are mostly Geothermal Power Plants. There is a probability that they might get some downgrades due to higher costs but in the long run, it’s still earning at a good 14 P/E ratio. Accumulate below or near 6.00.
Overall, this has proven that EDC is in long term uptrend, with heavy long term buyers on 5.40 last year and 5.70 to 5.80 recently. At the end of the year, if it breaks out of 6.50, we can expect it to come close to 7.00-ish. Remember that FGEN has an option to buy EDC shares in 2011-2012 at a premium of 6.19. (Special thanks to Jonard (http://pinoysmart.blogspot.com )for clarifying the options price).

FGEN, the baby brother of EDC is still in short term downtrend, but a very minor one, downtrend resistance is at 12.10 or close to that. Tsupiteros can short it near 12.10, but for long term traders, this one has a very probabilty to breakout as early as next week, breaking out of range can lead it instantly to 13-14 which can copy the current behavior of EDC. Accumulate near 11 if it still in short term downtrend.

PCOR, the 2Po news has gone down, and subsiding hype of this stock sent this hanging also. MACD is negative, and its earnings is way to overpriced, the lifeline of this stock depends on the 2po, and not the earnings itself. Currently, I suspect it is forming the flag pattern, which can send this stock to 18 in few months, but treat it an opportunity to get out. Watch out and Avoid, as 80% of these scenario goes for a breakdown.

SMB, same with PCOR, the hyped 2PO is sending this stock to an overpriced situation. Clearly MACD and RSI is heavily negative divergence, and its still an uptrend??? Can be tradable at the peak, but watchout, if it gets a breakdown, it will surely dive back to 20s or below. AVOID.