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Chart of the Week - Apr 21, 2008

 ATN Holdings, Inc. "A" Shares (ATN)

ATN Monthly Chart - Continuing to Trend Up Strongly

charts are courtesy of Metastock

ATN Weekly Chart - Failure to Drop may be Bullish 

charts are courtesy of Metastock

ATN Daily Chart - Consolidating between 4.90 and 5.40, Consolidating before Continuing to Trend Up?m 

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

ATN has been silently moving higher and higher in the last few weeks and, from a low of 1.80 just last January, the stock is now trading at 5.20. While the entire market has been doing nothing but drop during that period, this one has somehow bucked the overall trend of the market is behaving completely opposite. Some say that this stock is climbing because it is very much undervalued in relation to its assets. But, isn't the rest of the market undervalued as well? Some say that this stock is climbing because of its mining prospects. But how come the rest of the mining stocks aren't acting in the same manner? Who cares what the reason is?!! The important thing is that there is still something in the market that we, Tsupiteros, can play. The only problem is, the stock has already climbed almost triple from its low of 1.80 just last January 2008. Let's try to find out if this one is still worth buying or not at current levels.

First, let's examine the long-term chart of the stock. In its monthly chart, you can see in the chart above that the stock has convincingly broken out of its major resistance at 3.65 and is now trending up to the upside. The last time that ATN was trading at these levels was during the year 2000. Obviously, holders of this stock, who have been holding their positions since that time, are quite ecstatic right now since it looks like they will at least be able to break-even their positions. The chart above shows that the previous highs of this stock are at the 7.70 and 9.00 levels. Unless all those who got stuck at those levels during the year 2000 has already sold, I would expect prices to encounter resistances before they hit those levels, that is, of course, if prices will be able to reach those levels. If, on the other hand, the stock drops from current levels, I would continue to be bullish on the stock as long as prices stay above 3.65.

In the medium-term, you can see in the weekly chart above that the stock is already quite overbought and has actually even formed a potentially bearish shooting star pattern two weeks ago. However, despite being overbought, the stock failed to drop and has even climbed back up last week. This inability to drop despite it being overbought, is a good sign for the bulls. Had the stock been weak, it ought to have corrected significantly already by now. If the stock continues to follow its trend, I wouldn't be surprised if prices continue to climb and head towards the 6.30 to 6.50 levels. I would continue to remain bullish in the medium-term in this stock as long as prices stay above 4.90.

For the short-term, you can see that prices appears to have already held above its support at 4.90 and now looks poised to retest its previous high at 5.40. However, volume has now generated enough, in my opinion, to convince me that prices will break above its previous high at 5.40. If the stock fails to generate volume within this run by the next one or two days, I suspect that prices will probably continue to move sideways within this 4.90 to 5.40 range for the meantime. If it is able to absorb all the sellers at these levels, then, that would probably be the time when prices could eventually break above 5.40 and continue to trek higher.

Tsupiteros, who currently have positions in this stock, are recommended to just hold and use a break below 4.90 as your mental stop. For those who would like to buy this stock, I would suggest that you buy it already now and just also use a break below 4.90 as your mental stop. With the stock already rebounding from its lows, I don't expect prices to drop back down anywhere near 4.90 anymore by the next one or two days. If it does, then, I would be a bit concerned. Just remember, there is that possibility that prices will simply consolidate between 4.90 and 5.40 for now, especially if volume fails to increase. Therefore, Tsupiteros, who prefer using counter-trend trading strategies, may probably want to sell as close to 5.40 as possible. Just be sure you know how to buyback higher if in case the stock fails to hold below 5.40. Position-traders, who are currently long in this stock, are also recommended to just hold but use 4.50 as your mental stop. For Position-traders, who are probably looking for an entry in this stock, you may also want to just follow the signals of the short-term traders right now. Otherwise, just watch the stock in the sidelines first and wait for more evidences that the stock isn't going to drop anymore before you decide to enter it.

With hardly anything else climbing spectacularly nowadays other than ATN, it is certainly starting to become like what GEO was last year. Let's just hope that this "leader" continues to climb and eventually influences the rest of the market as well. Otherwise, if the stock starts to fall back down, there might not be anything else left to play.

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.