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Universal Electronics, Inc. (UEIC) provides pre-programmed universal wireless control products and audio-video accessories for home entertainment systems. UEIC had been in a strong uptrend throughout 2007, but suffered a sharp reversal off the highs at the end of the year and took back all of 2007's gains within just a couple of months. Since then the stock has been congesting at the lower end of the year's range and recently experienced its second swing higher on a weekly time frame. Stocks tend to break out of trading ranges following a second or third swing off the lows of the range, so the greatest opportunity is when one catches these moves as they are just beginning to turn lower. Since this is the second swing, there is still the potential for a third, but as long as the upper channel holds then the setup remains valid.

A target on this particular pattern is an equal move as compared to the initial drop off highs, which in this case is the move lower at the beginning of year, which could easily take the stock back into $7/share territory over the course of a year if the pace on the breakdown were to remain comparable to the previous descent. However, when prices start to get this low, the odds are higher than the pace on a breakdown will actually be more gradual than the initial reversal, so paying attention to previous lows and congestion levels is a better way to gauge potential. This makes the $17 and $13 a share levels strong support.

Stocks with similar setups include AMZN and XRAY.


- Brandon Fredrickson & Toni Hansen

Toni Hansen's Blog: http://www.tonihansen.com/blog
Positions in green have triggered and are profitable. Positions in red have triggered but are not yet profitable. Those in blue have not yet triggered.

NOTE: A lot of positions were closed this past week with trailing stops and exits under support levels. Those that were closed are now located in the larger record.


Watch Stocks:
Long: Most of these will be more ideal after congestion on a weekly time frame: ALTR, ABT, MAT, ABI, JNJ, SMCI, MKC, BF.B, REGN
Short: ADSK, XRAY, AMZN
Remove from watch : GPS, AEP, LPNT, PCH, AEP, AMZN


9/29/2008 Japanese yen (CurrencyShares Japanese Yen: FXY). Beginning this past spring, the yen has corrected off highs. Unlike many of the other currency corrections, however, it began a bit earlier and the pace slowed into August after three waves of downside. An initial buy setup triggered in the yen heading into the beginning of September. The volume increase this month is a positive development in support of a larger upside move. With this particular three way correction, continuation patterns can offer another opportunity to enter the position. The action itself may even pull back to form a 2B on a weekly time frame later this year. Otherwise a base can form and break higher. Both of these possibilities are drawn on the weekly chart. The highs of the year are strong resistance, but over the course of a year or so, another correction along those highs can lead to another breakout, such as is displayed on the monthly chart. As a result, this has long term potential as an investment, as well as shorter term potential as a multi-month position trade.

9/29/2008 Autodesk, Inc. (ADSK) offered an initial short setup on 9/29/2008 under $33.08. It hit lows of $30.32 to far. It has room for another swing higher on the weekly time frame with the 20 week sma serving as resistance, so be prepared for this possibility.

9/22/2008 Abiomed (Nasdaq:ABMD) Overall the weekly chart remains in a nice, strong, uptrend, making higher highs and higher lows. Since its peak in late July AMBD has pulled back in a nice and orderly manner, forming a clear bullflag pattern. This pullback has brought AMBD to an area of both moving average and price support. Charts that have multiple forms of support often see the strongest bounces. We will be looking to buy shares of AMBD on a close above $19.00 per share.

9/15/2008 Hey gang! I don't have a new focus stock for this week since a lot of the stocks I am watching I feel are a bit premature for a setup at this point. I have added Autodesk (ADSK), however, to my short watch list. It is forming a descending triangle on a monthly time frame and could easily shape up over the next couple of months for a breakdown if the momentum shifts on the upside compared to downside with a corresponding drop in volume on a weekly time frame.

9/8/2008 Intuit, Inc. (INTU) was trading in narrowing triangle from 1999-2005. At the end of 2005 it broke free from the triangle and rallied throughout 2006. Since the end of 2006, however, it has been correcting once again. It completed the second wave of a correction early this year and has been making its way back to the upper end of the corrective channel. A break from this channel will trigger a buy on the monthly time frame. The last low within the channel will serve as support. Initial target zone of $40. INTU offered an intraday setup in the $30.50 zone on 9/18/2008.

9/8/2008 Kraft Foods Inc. (KFT) gave an initial watch list buy setup on 9/8/2008 over $33.10. This may still rest longer on a weekly time frame, however, before momentum increases. It has hit a high so far of $34.97 (+$1.87, +5.65%).

8/25/2008 Convergys Corporation (CVG) The next major resistance zone is $17-$18 a share, which will serve as the initial target level. If the momentum is strong into that target, then shares can easily land in the $24 zone over the next year. $11.50 is support in the zone of the July low. CVG gave an initial buy trigger on 8/27/2008 over $14.56. It has highs of $17.00 (+$2.44, +16.76%). First resistance zone hit.

8/25/2008  Unum Group (UNM) gave a watch list buy trigger on 8/28/2008 at $24.90. It has highs of $30.00 (+$5.10, +20.48%).

8/25/2008 Medco Health Solutions Inc. (MHS) gave a watch list buy setup on 9/8/2008 over $48.72. $44.50 is support. It has hit highs of $50.88 (+$2.16, +4.43) so far.

8/11/2008 TD Ameritrade Hldg. Corp. (AMTD) Cup-with-handle on the monthly time frame. While this breakout began on a daily time frame several weeks ago, it is still at an early stage on the monthly time frame, so I will begin to build a position in this stock. Larger target in the $36.50 zone. It gave an initial buy trigger on 8/28/2008 over $20.50. It hit highs of $23.48 (+$2.98, 14.54%).

8/4/2008 Hitachi Limited ADR (HIT). Beginning of position being built from $74.48 zone on 8/8/2008.  My target on HIT is $100-$105.

Watch Stocks:
Long: Symantec Corp. (SYMC) gave an initial higher risk buy trigger on 8/5/2008 over $21.86. It has highs so far of $22.80.

7/14/2008 Royal Gold, Inc. (RGLD) Although we missed the initial trigger on this one about two weeks ago, we still have plenty of room to catch it on smaller time frame corrections. This monthly triangle has just now begun to break higher. My target on RGLD is the $48-50 zone. June's lows will serve as support. Initial trigger on 9/11/2008 over $28.68. Secondary setup on 9/16/2008 over $32.46. Highs of $39.50. Initial resistance hit.

6/23/2008 Almost Family (AFAM) gave an early buy trigger on 6/26/2008 at $26.60. It has highs so far of $44.44 (+$17.84, +67.07%). Most trailing stops hit.  - Brandon Fredrickson

6/9/2008 Psychiatric Solutions (PSYS) gave a swingtrade buy trigger on 6/18/2008 over $37.00. It has highs so far of $40.90 (+$3.90, +10.54%). Position trade potential. This has a higher chance to correct for a few months, likely in price, before it can have room to break higher again as a position trade.

6/2/2008 McCormick & Company, Incorporated (MKC) gave an early buy setup on 6/5/2008 over $37.73. It does still have potential to pull back a bit more on the weekly time frame before it can confirm a larger break of this range. It has highs so far of $42.06 (+$4.33, +11.48%). 

6/2/2008 Exelon Corp. (EXC) gave a short trigger on 6/26/2008 under $89.36 with resistance at $92. It hit lows of $58.30 (+31.06, +34.76%).

11/12/2007 Lilly Eli & Co. (LLY) gave a short setup on 12/31/2007 under $53.71. It has lows of $41.24 (+$12.24, +23.22%). Some trailing stops hit.


* DISCLAIMER: Results are based upon best price hit before the position was closed, or the stop if that hit first. Note: Trading in commodities and securities may not be suitable for all individuals. Consult your broker or other professional to determine your suitability. The discussions provided by Trading From Main Street are for educational purposes only and should not be taken as a recommendation to buy or sell the referenced security. Past performance is not indicative of future results.

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