For the previous 2 stocks analyzed as of close on 03/06/2009,click here (RGR, SWHC).
The basic rules of analysis are explained there.
AIPC American Italian Pasta Co. – The price at close was $30.42 and the near FCF fair value is about $48. As long as AIPC does not disappoint on its earnings estimates, one may consider this stock cheap (at least in the way that I analyze them). Take a look at a weekly Fibonacci retacement chart That chart shows that in the last couple of weeks the price has hit a 0.618 retracement from the previous low to the prevoius all time high with 7 confluence points. Studies conducted not only by Larry Pesavento but by several other students and associates of Robert Prechter (the modern “keeper” of Elliot Wave Theory) show that if there are at least 4 confluence point intersections should exist to confirm a momentum high or low.
We have that now with AIPC on a weekly basis. The daily chart also shows a loss of momentun and a gap to be filled to the downside. The 0.618 retracement of that last upleg was at 26.88. That is likely the next price target. It is also possible that if momentum turns it COULD be a long entry point at some time in the future. But we do not have the momentum or pattern confirmation as yet.
This stock could indeed have one more leg up so if one had been long since December a safe stop would be below 22.76 (the last swing low) and wait out the correction. If not long, I would wait. If aggressive one might actually short the stock here (but one must look at shortable inventory to check that). A break below 29.19 would probably begin the gap filling process to the downside. 29.19 is the low price that occured after the gap up occured.
For now, I think one should be prepared for that gap to fill.
ICE – Intercontinental Exchange Inc. Close 03/06/09 $60.39 Near FCF value is approximately $85. It is difficult to find Fib patterns that figure strongly on a daily basis. Perhaps the best way to analyze ICE is to look at the daily channel within which it is trading. The top end of the channel is 67.01 and the last major support level was at 69.01 (the green arrow). The gap fills at the 0.618 retracement (72.21). If I had to guess, I think the gap could fill, but if long I would make sure that I had the trade protected at break even levels. I have not analyzed patterns, but I think that price channel is so cluttered that this form or standard price analysis will likely do the trick. I think 67.01 is the most probable target in the next 10 trading days (or perhaps more).