Here's my TAke:
THQI is leaning more towards a double-top formation than a cup and handle. I'm not saying that THQI is about to make a long-term top, but it seems that the stock faces a lot of resistance at $24.
I believe that THQI will trade between $19 and $24 for the next 2 weeks, with possible support at $20.
I think the best moving average to watch is the 100-day MA, which should reach $19 in 2 weeks. If THQI were to fall below this support level (both the price and the MA trendline, the stock would likely fall to its 200-day MA).
I suspect that the stock may be around $20 (near support and 100-day MA) before earnings are released. I'm guessing that THQI will rally to $23-24 on Monday 2/23 and Tuesday 2/24.
Q4 results, the outlook and the conference call will be positive enough to encourage panic buying. On Wednesday 2/25, we will witness a strong rally, as the stock blasts through $24 on ~750,000 shares traded. By week's end (2/27), the stock will be in the high 20's. The rally will eventually falter, and the stock will fall on low volume to retest the previous resistance at $24. By April, the stock could rise above $30. The Q1 earnings release in late April should provide a strong boost to the continued rally toward the mid-30s. Reports of extremely strong sales of Quest 64 should certainly help.
The near-term outlook will be clarified by Monday's action. Several TA indicators (MACD, Williams %R, Momentum, etc.) are on the verge of becoming negative, as already have the stochastic oscillators. If Monday sees a strong rally, the TA will become more positive. If not, the scenario I outlined above could happen.
I'm not certain about the short-term outlook (next week or 2), but beyond that, the stock should continue to perform well.
Todd |
