Stock Picks For Wednesday: Sohu.com, Rambus And Capstone Turbine

Chart courtesy of www.stockcharts.com ( click to enlarge )

Sohu.com (SOHU) produced an oversold bounce today but the rally struggled near the $62.50 level. The stock remains in downtrend. Deeper decline is still possible to 57 zone next week. Initial resistance is at 62.50, as long as the resistance holds, I’d expect downtrend to continue. However, above the resistance will indicate that the fall from 69.54 has completed, and the following rebound will bring price back towards 65 zone.

Chart courtesy of www.stockcharts.com ( click to enlarge )

Rambus (RMBS) lost 16% today on strong volume after the memory chip maker cut its sales guidance and raised estimates of litigation and compensation expenses for the quarter. The short term scenario is not encouraging for the investors. This is a good sign for the bears. Rambus shares have broken some key supports in the $18 to $16 range. In other words, the long-term trend has turned negative. My target will be the $13.11-13.25 range. Please note there is some support near $14 and I expect a bounce there but the prevailing pattern is bearish. Fresh exposures may be avoided.

Chart courtesy of www.stockcharts.com ( click to enlarge )

Capstone Turbine (CPST) - Tuesday’s trading session marked a test of the 0.78 support line. The stock filled the gap that was left from its run a few days ago. Plus, volume was a little higher than yesterday suggesting a reversal trend. Tuesday’s high of $0.87 is resistance for Wednesday’s continuation move. If CPST can break through this high we should see another upside move. There could be good upside in CPST so watch the stock closely on Wednesday. This is a risky play but I think this stock could go much higher very soon.

Disclaimer: Trading stocks involves risk, this information should not be viewed as trading recommendations. The charts provided here are not meant for investment purposes and only serve as technical examples.

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Comment by Tom Blund

2009-06-24 06:44:21

Antonio: I think you’re a little after the fact on Rambus, the downdraft was more shorts taking out stops on the guidance news (which was minimal as far as reduced guidance). Keep in mind that the EU will finalize it’s deal with Rambus in a few short weeks, the AT trial and ITC trial is right around the corner and new licensees might be signed at any time. The AT trial alone has a potential billion dollar windfall for Rambus and settlements before this trial starts in September are all but granted with some of the memory manufacturers. I think this is a strong buying opportunity with a 6-12 month perspective.

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