PRGS Pennant Formation?
i found this PRGS chart today while doing screens on stockcharts. could this be considered a pennant/flagpole continuation indicator? i have no idea what PRGS does, but this chart looks pretty cool. from what im seeing, it obeys the definition of a pennant formation. (ie, strong move up off the previous resistance on heavy volume.) according to the pennant definition, this stock is supposed to continue its upwards trend after it consolidates for awhile within the range of the pennant.
but yeah, im not putting any money into this stock b/c i dont know anything about the company. i'll be checking in once inawhile on this stock to see how accurately the technical analysis plays out. if you're familiar with PRGS and know whats up with this stock, i hope you found this information useful.
posted by jwu at 7/11/2005 12:08:00 AM
4 Comments:
You are correct as to the pennant/flagpole formation. This is a stock that just keeps pluggin along. There is a fairly large July and Sep 30 Call option outstanding. A few weeks back someone bet hard on the 30 they did sell off 1/2 of the July 30s but I would expect that there is a plan to keep the stock at least in this area for the balance of the week due to fridays experation. Personally I would love to see a breakout to 35ish. We will see how this week pans out.
Progress is a software company. It has recently set up a software system in taxi's that has become highly popular. The company has no debt and is extremely well-managed. The P&F chart (6x) is showing the completion of a substantial base (a duplex horizontal), with a breakout over 30, and a workout initial target of 45/46. The stock is a slow mover, and I expect there will be some consolidation as it hits 35. There is a substantial breakaway gap in the low 20's, which eventually will be filled - but that may take quite a while to happen.
As an addendum to the foregoing comment on PRGS, you might want to look at IDNX to see the bottoming process. This stock closed today (7/11/05) in the mid 5's and has a small gap at 5.20 from three days ago. The gaps in IDNX always get filled rather soon. The earnings are due soon, and it is in a turn-around situation, just going into the black. It suffered greatly the last two years from a write-off (about $100 million), and from dilution, because of the takeover. It is just now in the last stages of completing a base. The company is well-managed and is a long-term (3 - 10 years) growth situation. Just about everything known about this company has been discounted, so it will move slowly and in tandem with its earnings. In short, it won't just soar up. As for PRGS (once again), calls are a risky deal because the stock moves slowly. It may take several months for the uptrend to complete.
thanks for the great info guys. i agree that options will be a factor this week in PRGS.
ive also been keeping tabs on IDNX ever since barrons mentioned them in the homelnd security issue. thanks for the insight on both PRGS and IDNX. i'll continue to update as i research more about both companies.
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