Looking for some fresh trading ideas in a market environment that isn't offering many? Take a look at MEDNAX Inc. (NYSE:MD) and Westport Innovations Inc. (NASDAQ:WPRT). Though they're pointed in different directions, both MD and WPRT appear to be on the verge of trade-worthy moves. The fact that the two are nearly mirror images of one another is strictly coincidental.
After hitting a multi-year low in April, WPRT shares have clearly been on the rise. The stock's crossed above all of the key moving averages, save one - the key 200-day moving average line (green) at $18.28. Westport Innovations came close to hurdling this key long-term line in late June, but a brush with the key level sent the stock back-pedaling... for a few days. Shares bounced back today, crossing above the 200-day average for a while this morning before settling back to get comfortable right around the 200-day average's value.
Though not over the hump yet, Westport Innovations Inc. may not be a bad bet - if not now, then soon. WPRT shares crossed above a major long-term resistance line in early June, and has continued to advance. After months of suppression, there's a lot of pent-up buying waiting to unfurl here. And, it looks like it's going to happen.
Westport Innovations Inc. manufactures natural has engines.
As for MEDNAX Inc., it's hanging by a thread right on top of its 200-day moving average line (green). On slip-up, however, and the balance could be disrupted, MD could break under the 200-day average at $56.76, and a selling avalanche could begin. There's a modest chance of a floor being found around May's low of $56.25, but most likely, once the 200-day average breaks down as a floor, the sellers aren't apt to look back.
To fully appreciate just how vulnerable MDVN is here, one has to take a step back and look at a weekly chart. It's in this timeframe we can see that the recent stumble from MEDNAX has snapped a rising support line that's guided the stock higher for more than a year. This is a major paradigm shift, and should the 200-day moving average line not hold the stock up, there's not much else left below there to stop the bleeding.
MEDNAX Inc. is a provider of specialized health services.
Looking for something a little bigger? Take a look at the SmallCap Network Elite Opportunity service. It trades large cap companies, in addition to providing you daily market insight and close looks at major market trends. You can even get a free two week trial. Just click here to learn more.