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BluePhoenix Solutions Bears Watching

01/26/09 09:42:53 AM
by Koos van der Merwe

Finding shares that could be possible short-term buys are not easy right now, but this one looks interesting and bears watching.

Security:   BPHX
Position:   Accumulate

BluePhoenix Solutions engages in the development and marketing of enterprise information technology (IT) modernization solutions worldwide. The company was founded in 1987 as A. Crystal Solutions, Ltd. Its name was changed to Crystal Systems Solutions, Ltd., in 1996, and to BluePhoenix Solutions, Ltd., in 2003. The company is based in Herzliya, Israel.

FIGURE 1: BLUE PHOENIX SOLUTIONS, WEEKLY. Note how the price has dropped from $22.61 on October 26, 2007, to $1.31 on November 28, 2008.
Graphic provided by: OmniTrader.
Figure 1 is a weekly chart, showing how the price has fallen from a high of $22.61 on October 29, 2007, to a low of 1.31 on November 24, 2008. The wave count suggests that a wave C bear has been completed, and that the stock price should now rise in a wave 1 of a new bull market. Note too that the indicator, a Carter squeeze, has given a buy signal, and the price moved up from $1.30 to $1.99.

The chart also shows a rule of eighths parameters, drawn from the high to the low. Note how the price fell and tested the parameters on the way down, both as support levels and resistance levels in the correction. This does suggest that the price target could be $4.00, the first line of resistance. Volume rose slightly as the price rose, and fell on the recent two-week correction.

FIGURE 2: BLUE PHOENIX SOLUTIONS, DAILY. Note that the price of $1.99 is currently testing a pivot point high of December 10, 2008.
Graphic provided by: OmniTrader.
The daily chart (Figure 2) shows the voting parameters suggested by the systems I prefer to use in my analysis. I use nonoptimization strategies that in numerous testing, both live and computer testing, have given me the best return on interest. Note that the two strategies, "Jak8gian non opt" and "Carter Jak non opt," have both given buy signals. Volume is low. Note that the price at $1.99 is currently testing a pivot point high of December 10, 2008.

Charts are suggesting accumulation for BluePhoenix Solutions, suggesting strength as and when the overall market starts recovering with a target of $4.00.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address:

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