The Red Chip recommendation got some press on CBS Marketwatch today. JAKK is acting great. What do you guys think? To $25 within ten days? If the market is flat to up of course.
Ray's TA:
Long Term:
JAKK is in a long term uptrend. The only caveat here is the fact JAKK hasn't
trade for many years, so the analysis is somewhat limited. But since it has
been trading, the action is good. On a weekly chart, the stock has major
support at $16 and is above its long term trendline.
Short Term:
This analysis must be put in respect with two things: the market and the
industry group. The Leisure Toy/Game industry group is the worst performer
of the 200 industry groups S&P covers over the past 14 weeks. Stocks are
heavily influenced by industry group moves, so this overhang could stymie
any advances.
Second, the market, you are well aware of. The Nasdaq is still in a bear
market. Take a gander at a 6 month chart on the Nasdaq and graph a
simple 18 and 50 day moving average. Notice the 18 day has crossed below
the 50 day moving average. You need to see the 18 day cross back above
the 50 day before we can be sure the market is gaining strength (and my
own opinion, this won't happen until at least October or November of 2000).
Now, having dispensed with the caveats, the individual stock chart actually
has improved considerably over the past few weeks. If you draw a trendline
from the high of 10/26/99 through the highs of 12/6/99, 1/6/00, and 2/11/00,
you see a series of lower highs and lower lows JAKK has formed. This is
bearish, but that trendline was broken to the upside on 4/6/00 (interesting
the turning points occur around the 6th of each month). Since the base low
of 3/13/00, JAKK has formed a series of higher lows and higher highs, a
bullish sign.
The stock is currently resting at its 200 day moving average, which it needs
to hold to maintain the current strength. The rallies in February and March
were attempts to break above the 200 day moving average but both failed.
The current one has staying power.
JAKK needs to break $24 on good volume and close 2 consecutive days
above it. If it manages to, the stock should rise to $28, having taken out the
most significant overhead supply at or below $24.
For short term trading (if I were buying Nasdaq stocks, even though I am not
right now), I would buy at or near the 18 day moving average so long as the
stock holds above it. The 18 and 50 day moving average crossed below the
200 day moving average back in January and now are on their way back up
above it. The 18 day is almost above it which should bode well for the short
term.
-----< Net, net, JAKK's long term is bullish and short term is improving. The
fundamentals, though not discussed here, are impressive, showing
consistency and expectations for more growth. In my opinion, once $24 is
taken out, JAKK should run. The biggest risk is the market and industry
group. Hopefully they will improve to better JAKK's chances of success.
Conservatively Yours,
Raymond J. Norris |
