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This edition of Stock Watch focuses on the most successful chart pattern around (in my opinion).. the flat base (for more on the flat base and other chart patterns, see the tutorial section "Chart Reading"). The flat base can occur in a couple of different situations. One situation is 10-15% from the pivot point after a successful breakout (IBD has referred to this technical action as "3 weeks tight"). The stock will surge in price, consolidate quietly in a flat formation, then resume its advance. The flat base can also occur after a significant gain in a stock and will form over a much larger time frame (5 weeks or more). Keep in mind that flat bases often break out when you least expect it. Get in the habit of setting real time alerts (most brokerages offer this service for free) so that you don’t miss out! Let’s take a look at a few of the best flat base opportunities the market currently has to offer.
Mine Safety Appliances (MSA)
Industry: Security & Protection Services
Mine Safety first broke out at 44.10 and has been consolidating quietly in the last few weeks, possibly preparing for the next surge. Look for a break above 52.60 as a buy opportunity of this top stock.
Mine Safety Appliances Company manufactures and sells products designed to protect the safety and health of people throughout the world. The Company’s principal products include respiratory protective equipment that is air-purifying, air-supplied and self-contained in design; instruments that monitor and analyze workplace environments and control industrial processes; thermal imaging cameras that enable firefighters and rescue workers to see through smoke and darkness, and personal protective products including head, eye, face and hearing protectors and fall protection equipment. Many of these products have applications for workers in industries such as manufacturing, municipal and volunteer fire departments, public utilities, mining, petroleum, construction, transportation, the military and hazardous materials clean-up. Consumer products target the do-it-yourself market and are available through select home center retail outlets under the MSA Safety Works brand
MICROS Systems (MCRS)
Industry: Technical & System Software
MICROS Systems surged over 40% very quickly in November and has spent the last month digesting those gains in a nice, quiet, flat base consolidation. The initial surge in price and volume at the end of October shows big demand from the institutions. Look for a break above 76.67 on heavy volume as a signal that the next wave of the advance is beginning.
MICROS Systems, Inc. is a worldwide designer, manufacturer, marketer and servicer of enterprise information solutions for the global hospitality and specialty retail industries. The information solutions consist of application-specific software and hardware systems, supplemented by a wide range of services. The hospitality industry includes numerous defined market segments, such as lodging (including individual hotel sites, hotel central reservation systems and customer information systems), table service restaurants, quick service restaurants, entertainment venues such as stadiums and arenas, business foodservice operations, casinos, transportation foodservice, government operations and cruise ships. The specialty retail industry consists of retail operations selling to consumers both general and specific products, such as clothing, shoes, supermarkets, hardware, jewelry and other specialty items.
M Systems Flash (FLSH)
Industry: Semiconductor – Memory Chips
The theme of big demand followed by quiet consolidation continues with M Systems and can be seen in the chart above. Look for a break above 20.54 as a buying opportunity.
M-Systems Flash Disk Pioneers Ltd. designs, develops and markets flash data storage solutions for digital consumer electronics markets. The Company primarily targets two fast-growing digital consumer electronics markets: the universal serial bus (USB) flash drive market with its DiskOnKey product and the multimedia mobile handset market with its Mobile DiskOnChip product. DiskOnKey is a personal, portable, thumb-sized flash disk drive for the storage and transfer of digital data files, including media files, such as pictures and audio files. The DiskOnChip product jointly developed with Toshiba Corporation is a monolithic flash disk product that combines flash memory and a controller on a single die. M-Systems also sells flash data storage products targeted at the embedded systems and industrial applications markets, including its DiskOnChip and Fast Flash Disk products.