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Chart of the Week - Apr 28, 2008

 Atlas Consolidated Mining & Dev't Corp. (AT)

AT Monthly Chart - Held Above Support?m

charts are courtesy of Metastock

AT Weekly Chart - Downtrend Ends but...m 

charts are courtesy of Metastock

AT Daily Chart - Bearish Inside Day pattern but Strong Uptrend 

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

Atlas Consolidated Mining & Dev't Corp. (AT) was one of only a handful of stocks that continued to climb last week. There's nothing new in here except that some brokers gave some bullish reports on the company and metal prices were strong abroad. For the last couple of weeks, some foreign buying has been registered in this stock. Maybe this is another reason why some brokers, especially Abacus Securities, started to become more aggressive in buying this stock.

In its long-term trend, the stock is now trading near its support in its monthly chart and looks like will close the month with a long white candle. It's too early to say whether this month's behavior already means that the stock has held support and will now continue to trend up. The stock will certainly need to give us more indications that prices will now be on the way up before we ascertain that the stock's long-term trend is still up. If the stock does prove to us that prices have indeed held its ground above its major support at 9.30 to 10.00, the stock's uptrend may eventually lead the stock back towards its previous high at 21.25, if not its resistance in the monthly chart at 32.50. Of course, the price will have to go thru several resistances first before it can do that. But, as long as the stock is able to convincingly breakout above its resistance at 16.50, I will already be looking at the 32.50 level as my long-term target for the stock.

In the medium-term, the stock has broken above its medium-term resistance line as represented by the red diagonal trendline across the weekly chart above. This behavior indicates that the medium-term downtrend of the stock has now officially ended. However, that doesn't mean that the stock will now start to trend up. It may enter a period of consolidation, especially if prices continue to trade below 14.00. At this point, prices may range-trade between 10.00 and 14.00. For the medium-term trend of the stock to start trending up, prices must first take out 14.00 to the upside. Right now, a break below the 9.50 to 10.00 support levels is now a remote possibility.

For the short-term, prices have been trending up for the last few days now but has formed a potentially bearish Inside Day pattern last Friday. Is this the end of the run for AT in the short-term? Possible, but I wouldn't bet on it yet as long as prices stay above 11.50. If, on the other hand, the stock is able to hold above its support at 11.50 to 12.00, prices may continue to trend up in the next few days and result in a retest of the medium-term resistance at the 14.00 level soon.

So how do we trade this stock? If you are a position-trader or someone who holds positions for a few weeks or months, I'd probably suggest to simply range-trade the stock for now. Since the trend of the stock in the medium-term is still just sideways for now, I would probably take profits as close to 14.00 as possible. For Tsupiteros, who are currently holding the stock, I would suggest that you simply hold on to your positions and use a break below 11.50 as your mental stop. Tsupiteros, who would like to buy this stock, are recommended to buy if prices are able to hold above its support at 11.50 to 12.00 in the next couple of days. At this point, in my opinion, buying the stock right now and trying to go for a home-run (targeting its previous high at 21.25 or higher), is still a gamble right now. Until the stock has proven to us that it could start to trend up in the medium-term and in the long-term, the best that I would do to this stock is simply trade it for the short-term.

Notes:

Short-term Traders/Tsupiteros vs. Medium-term/Position Traders: Recommendation for short-term traders or Tsupiteros are meant to be used by traders whose holding period are limited to one day to two weeks. Medium-term or position traders are meant to be used by traders whose holding period are two weeks to three months. Long-term investors whose holding period is more than three months should not follow these recommendations.