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Sunday, November 4, 2007

IBD 100

During the week, I normally post charts that are short term bullish plays. On weekends I like to try different approaches. Today I am going to look at 3 stocks on the IBD 100 which are bearish shortt term, but possibly have long term bullish potential. CRNT had been a big mover sincve Wall Sttreet discovered it in April. The things I like about it are: It more than doubled in prive in less than six months, it has outstanding growth fundamentals, and it was completely ignored by Wall Street prior to April. It appears to have hit a short term top and the daily chart is quite bearish. This is likely to build a base here, lasting from a few weeks to a few months, before it starts up again.

The weekly chart is even more bearish, with RSI and stochastics indicating downward momentum. Support is in the 14.00 area.

VSEC is another stock that has run up huge after being ignored for a long time. The daily chart has a bit of a bearish bias, indicating a short term top. This is likely to build a base here before starting back up.

The weekly chart is fairly neutral, although close to overbought. Stochastics are looking like they want to turn down.

DWSN hit a short term top in September, and looks like it is building a base here. I would like to see MACD go below zero before turning back up, that will be a very clear buy signal.

On the weekly chart, DWSN has not yet turned bearish, although the upside potential from here is quite low. The best case scenario here is a pullback and consolidation before we start moving up again.

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