Hello, folks. We're going to be short and sweet today, for a couple of reasons. One of those reasons is, the market's still stuck between a rock and a hard place, and there's not much new perspective to add until the market finally wiggles its way out of this rut. The second reason today's edition is going to be shorter than usual is, we've come across a trading idea I think you're really going to like, and I want to get back to our due diligence of this stock so we can have a special alert ready to go for you tomorrow morning.
Yes, you read that right - we're going to be naming a new trading idea tomorrow morning in an e-mail going out before the open.
I wish I could tell you about the company right now. Heck, I'd settle for being to tell you why it's so important we get the information out to you in the morning. But, I can't do either. I can't even tell you why I can't tell you, because even that might give too much away. Just be sure to check your inbox early on Wednesday. It'll all make sense then. In the meantime...
Bingo! Hurco Takes Off
Did you see Hurco Companies (HURC) today? Wow! Although shares didn't hang on to all of their 10% gain on Tuesday, the stock held on to a big chunk of the intraday gain. More important, HURC shares are back above the key line in the sand at $28.00. Only this time there's not a huge gap around that level begging the stock to pull back. While I can see shares sliding even a little lower from here as a few more profit-takers do their thing, the heavy lifting's been done - the new paradigm looks to be in place.
While the daily chart is compelling, we're now at a point where it makes sense to take a big step back and look at a weekly chart of Hurco and really get into the "bigger picture" reason we were willing to wade into a trade.
As the weekly chart shows, HURC has been in a converging wedge pattern for years. With little to no room left to maneuver as it approaches the point of the wedge pattern though, something's got to give. It looks like it's going to be the upper edge of the pattern giving way. Take a look.
It's not like Hurco shares will have to break out right away; it could take days if not weeks to get all the way out of the tightening trading range and catapult itself higher. It's right there though, you know? And with years of this buildup ready to be unleashed, I can see HURC rolling higher for several weeks. I see a strong double-digit winner in the making. It's worth the wait.
As for the reason Hurco Companies took flight today, it likely has something to do with the fact that the company filed an application for a 3D printing patent.
You may recall when we first looked at Hurco we compared its wares to 3D printers. That's not what the company does. The company makes CNC (computerized numerical control) cutting machines. Unless you know what CNC means, however, 3D printers are the easiest way of describing Hurco's product line.
Or, maybe this will help - where 3D printers generally layer materials to form a shape, a CNC machine carves a three-dimensional shape out of a block of materials. And yes, there's some crossover between the two technologies, along with the occasional misuse of the terms 3D-printing and CNC-milling.
Anyway, while HURC didn't come out and say it was getting into the 3D printing game, it wouldn't be a stretch for it to move in that direction now that it's filing 3D printer patents. The company could fill an important gap in the 3D printing industry - metal machining. 3D printers that can carve metal exist, but Hurco's been machining metal parts with CNC technology for years. It's got to have a better grip on metal machining than newcomers to the 3D printing arena do.
Whatever the reason, it looks like our HURC position is finally off and running.
This is where the portfolio stands as of right now. All things considered - like the environment - it's not bad. Besides, we just booked a 14% profit on ANI Pharmaceuticals (ANIP) that isn't on the grid.
On the Fence, But Not For Long
Like we mentioned to you above, there's not a lot to say about the market. Things were still very much undecided as of yesterday despite the gain, and sure enough, stocks proved they're still on the fence today. As a matter of fact, they proved it in spades.
Yes, the S&P 500 only had to brush the 20-day moving average line today to spark an upward thrust. Yet, all it took was a near-brush of the upper Bollinger band at 1985 to deflate the rally effort and send stocks back-pedaling again. The bears and the bulls both had a chance to take charge, and neither side was willing or able to do so. The NASDAQ Composite (not shown) gave us some similar action.
Even the VIX seems stuck in the mud. For a while today it looked like it was going to rejuvenate its upward thrust and plow past a key ceiling around 12.6, but that effort faded abruptly. Ditto for the VXN - the NASDAQ's volatility index.
The smart-money thing to do here is wait. I know that's tough to do for traders, but I promise you there will be plenty of opportunity to tap into once stocks finally pick a side and then start to move in that direction. And yes, I still agree with the Elite Opportunity's John Monroe that we could see some stronger moves start to firm up as early as Wednesday. We just get the feeling the market is finally ripe for a more significant move. It's just matter of getting started.
We can talk more about the market when there's more to talk about. In the meantime, don't forget to check in before the market opens tomorrow to learn about our newest pick. Set your alarm if you have to. We think you're going to love the idea based on the concept alone. The fact that the company's growth potential has already been proven is just a little gravy. It'll all make sense on Wednesday.