Saturday, January 10, 2015

MannKind and Lime Energy: Two Almost-Great Trades (MNKD, LIME)

The trick to profitable trading (though few great traders would ever admit it) is being in the right place at the right time. To do that, however, requires a great deal of patience waiting on the market's best "would be" trades to begin that potential moves. Enter MannKind Corporation (NASDAQ:MNKD) and Lime Energy Co. (NASDAQ:LIME)... two of the market's almost-great ideas right now. Though neither is off and running, both LIME and MNKD are on the verge and worth putting on your watchlist. Here's what we need to see for both to become worth taking a swing on.

As a refresher, MannKind Corporation is the developer of the inhaled insulin product called AFREZZA. It's been a long and dramatic journey for AFREZZA, and MNKD shareholders. But, there's a light at t he end of the tunnel now, and that's helping the stock. Granted, it's helping the stock erratically, but there's enough of an occasional bullish undertow to make it worth keeping tabs on.

Yes, MNKD has had a miserable past few months, falling from a high of $8.06 in June to a low of $4.20 this month. But, since that low we've seen a strong, V-shaped reversal effort take shape, which says the tide's turned... almost. Already ripe for a reversal, if MannKind Corporation shares can just fight their way above the 50-day moving average line (purple) at $5.42, that should seal the deal and clinch the budding bullishness.

The budding Lime Energy rebound is similarly-shaped, with the bottom of the V forming in October, and followed by decided uptrend. What's even more convincing about the LIME rebound that we're not seeing with MannKind is a ton of volume on the way up....volume levels we sure didn't see on the way down. This tells us the uptrend has - and is gathering - lots of participants, which are needed to keep the rally going.

The clincher for the LIME rally that will turn it into a full-blown and trade-worthy uptrend is a move (and ideally, a close) above $3.85, which has been support as well as resistance of late. Lime Energy Co. shares are already above the 50-day moving average line, and just a tad more progress could really unlock the potential upside the market would be willing to provide for the stock.

Note that these bullish outlooks for Lime Energy Co. and MannKind Corporation have nothing to do with their fundamentals, and neither are long-term calls.

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