Dressing For Success

AudioCodes
(
AUDC |
Quote |
Chart |
News |
PowerRating)
designs, develops and markets technologies and
products for the transmission of voice, fax and data. For
the fiscal year ended 12/31/00, revenues totalled $71.8 million, up from $31.2
million, while net income totalled $26.7 million, up from $10.7 million, reflecting
a substantial increase in its customer base.

In addition to the growing strength exhibited in its fundamental
numbers, AUDC is forming two potentially bullish technical chart patterns, a low-level 11-week cup and handle along with a Bow
Tie
. The 30 exponential moving average, 20 EMA and 10-day moving average
have all “rolled over” forming the look of a bow tie.

 

 

While trying to pick tops or bottoms can cost you dearly, the
cup-and-handle basing pattern combined with the Bow Tie could be signaling the
start of a countertrend move for AUDC.

Here is a stock that has
broken out recently but may not be over-extended and provides defined risk at
today’s gap (still not filled). Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating)
, one of the country’s ten
largest single-family homebuilders, announced a 26% increase in monthly orders
today. But the stock has been on a run prior to this news evidenced by its
three-month RS from the Stock
Scanner
of 98. It has also seen significantly higher volume in recent weeks.
BZH shows signs of a runaway, either lapping, thrusting or gapping more than
seven times during the past 21 trading days. Today’s gap, if it is not filled,
is the first sign of a breakaway gap. BZH is up 4.28 at 53.73.

One additional note in
relation to BZH, Salomon Brothers downgraded the stock on Jan 29. Brokerage
recommendations can often be used as contrary indicators–the stock has rallied
as much as 13.4% since the downgrade. For a broader perspective on this phenomenon,
see Goran Yordanoff’s Tomorrow’s
Hot Spot’s
column from Friday.

Until tomorrow,

Duke and Marc