Tollgrade Trying to Make the Grade
An intermediate-term trader will keep his game plan
spread on the table, looking for key ingredients both on the fundamental and
technical side to fall into place. Tollgrade
(
TLGD |
Quote |
Chart |
News |
PowerRating) provides us
with a good example of a stock that is interesting both off its recent news and
its technical factors.
TLGD has surprised analysts by beating consensus earning estimates three
quarters in a row. This maker of telecom testing equipment is riding a fast
growth curve with 2nd Quarter results up 108% year over year.
Technically, TLGD’s price action is squeezing into the apex of a
five-month triangle. As long as earnings and revenue growth stay on track,
traders will be looking for the potential breakout to be to the upside. Of
course, much also depends on market dynamics as we are heading into the season
that has been traditionally on the weak side. Thursday’s breakout attempt
was…just that…an attempt. It’s failure to break out of the triangle should
come as no surprise as it was accompanied weak weak volume. A more durable breakout
may come eventually, but we’ll have to see more shares change hands.
See you tomorrow,
Eddie Kwong
Loren Fleckenstein will be on vacation and will return on
Wednesday Sept. 20, 2000.