I have not looked at Claude Resources in a while and this week it came up in some of my scans. When I looked at the chart I noticed something that keeps coming back over and over in stocks that I have not looked at in a while. Trend lines that are still valid months after I initially drew the chart. In the case of Claude Resources, I last wrote about it in the November 1st, 2010 weekly newsletter and the trend line is still valid. We've had two nice bounces off of it (which I missed not having looked at the chart once I reached my target back in November) but this time I'm keeping an eye on it...

Look at the original chart drawn back in November (the first one) and notice how it has behaved as it neared the trend line that was drawn. This happens very often on chart patterns, the supporting line of the pattern, in this case the ascending trend line, become long term support and can be used a entry points for future plays. So what I'm looking for in this a continued drop to the trend line and wait for the bounce from it. This should place entry around $2.18 on it but wait for the confirmation of it with a green candle above the trend line after it has touched it. A failure of the trend line will bring Claude Resources back below $2.00 and possibly back to the mid $1.80's.

Alternatively, we have the same trend line now forming the same chart pattern (Ascending Triangle) as the last time with resistance at $2.30. If the price does not continue to drop to the trend line but instead starts to move up, a break of the resistance line on high volume would trigger an entry. In either case, first target on Claude Resources is $2.55 for gains of 10.8% from an entry at $2.30 or 16.9% from an entry at $2.18. Second target is $2.80 on this play.

See charts here http://us1.campaign-archive2.com/?u=4d6d491aea8e01d93d8a1f390&id=11b23f657d#CRJ

For other weekly picks see http://us1.campaign-archive2.com/?u=4d6d491aea8e01d93d8a1f390&id=11b23f657d
Daily Comments at http://www.ta-picks.com/Daily.html
Learn to trade on a technical level http://www.ta-picks.com/Courses.html

Cheers!