TIPS

Three Mid-Cap Tips
by top chartist Zak Mir of Zaks-TA.com - 10/04/08

Today, we look at three mid-cap companies that are a little out of the mainstream. All three charts show that a little obscurity may be to the canny investor's benefit.

Wellstream (WSM):

Placing news is the reason for including Wellstream in today’s article after the recent appearance. The situation at the moment is that we are looking to see whether there will be a rebound off the floor of the November ascending price channel at 1,200p. While above this and on any intraday dips towards the 1,200p mark, one can regard the shares as being ready to continue. This would involve a rebound back towards the recent intraday highs above 1,350p, and perhaps as high as the price channel top towards 1,450p after that.

Drax (DRX):

There used to be quite a decent relationship between the price action of British Energy and Drax, until the share price of the former took off on the back of bid speculation. What can be seen now in terms of the price action of Drax is the way that there has been a W shaped rebound since the beginning of the year. If things continue as they are one would expect the right hand side of the W to be mapped out. The message at the moment is that while above the March support line at 550p on an end of day close basis the shares will go on to hit the top of the 2008 price channel at 660p.

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Collins Stewart (CLST):

My personal view is that brokers of all shaped and sized will experience a disastrous time over the next year or so as impossible trading conditions and lack of cash for “playing” the markets progressively take their toll. In the case of Collins Stewart one can see how there has been a descending price channel since October, with the line now running through 140p. Only an end of day close above 140p abandons the prospect of at least a test of the last March support zone at 120p. .

Best Wishes,

Zak Mir

*The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. Zaks-TA.com is owned by t1ps.com Ltd which is authorised and regulated by the FSA and can be contacted at 5-11 Worship Street, London EC2A 2BH or on 020 7562 3370.

Zak Mir is perhaps the UK's best known chartist. If you are a serious trader you should join his website Zaks-TA.com to benefit from all his latest calls and real-time trading signals, including a new analysis of those stocks Zak thinks have been oversold in the recent downturn. For more information visit Zaks-TA.com.