A snippet from the Wednesday Option Investor newsletter, regarding ELON:
"ELON makes hardware and software that
connects everyday devices such as light switches, washing
machines, and gas pumps to the Internet. ELON helps original
equipment manufacturers cut costs by linking electrical devices
to a control network, thus cutting costs through centralized
control and increasing service efficiency. ELON is expected
to report its first quarter of profitability in its next
earnings report. And the story gets better. ELON is estimated
to grow earnings 30% annually over the next five years. And get
this, ELON is expected to earn 19 cents per share during fiscal
2001, an 1800% increase over fiscal 2000! If the analysts are
correct, ELON looks attractive for the long-term.
And more good news, Thomas Weisel Partners initiated coverage on
ELON Tuesday with a Strong Buy rating and set a 12-month price
target of $80 per share. The analyst action helped ELON to buck
the decline Tuesday, and edge higher. What's even more
interesting is the chart pattern formed over the past two
months. ELON has developed a classic cup-and-handle formation,
which by the way, O'Neil believes is the most telling trading
pattern in the technical analysis universe. Although the stock
retraced much of its gains from earlier in the year, the chart
formation looks strong. The stock consolidated its gains in
the cup portion of the chart through much of April, it has since
rallied on heavy volume to form the handle. A breakout around
$72 would provide a good entry to go long. Notice the
resemblance of a cup-and-handle formed earlier in the year.
Look at what happened when ELON broke away from the handle." |
