BRCD and FCEL, on Monday, June 11, ran hard off the bottoms on huge volume. What does that mean? I’ve seen it so many times before where a stock will just drift lower on tiny volume. Then, it’ll slowly build up and explode on huge volume towards the end of the day only to drift back down the next day. Is there any play in these?

FCEL’s pattern at Monday’s close was a hard one to call. It opened lower, traded lower, then moved to its high only to pullback toward the close. The resulting candlestick pattern was a ‘spinning top,’ something covered in the Technical Analysis seminars. It is as the name implies: just spinning and not showing us much. The volume was good on the move up and that is a positive, but that close off of the high made it a harder read. The news after hours killed it.

BRCD on Monday showed a pattern that is easier to play to the upside. It opened slightly lower and then ran way down to just under its 50 day MVA. At that point buyers came back in an pushed the stock higher to close positive and near the high of the session. Volume surged back above average on the move. That shows us that even though there were sellers of the stock early, once it got down near its 50 day MVA, buyers came rushing in. That is what drove the stock back up and to a higher close. The higher volume shows us that the action was buying action. We like to see this type of action at support as it usually means a nice bounce up off the support that we can play.