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2 Tech Micro-Caps This Expert Is Watching

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Independent trader and technical analyst Roberto Pedone recently went over a few stocks he likes. 

ChannelAdvisor

First off is ChannelAdvisor Corp (NYSE: ECOM), an application software provider that Pedone expects to go off this week. “ECOM YOUR TIME IS NOW!” he writes.

Volume “has to be there in a big way,” he adds, or there’s risk of getting sold into once again. The expert wants to see the stock above $11.92 “with 500,000 shares on track mid-day.”

Related Link: Pedone: Twitter, Alibaba Are 'Solid' Setups

Pedone continues to look into shorts: 17 percent of the 19 million float is sold short, so the stock is pretty much packed with them. “Short-squeeze potential all day if this goes, so be ready.”

“I finally think all the stars are aligned here and I like the candles the last two days as ECOM has started to move out of a tight consolidation pattern,” he concludes. “Maybe use Tuesday's low of $11.32 as support, since it could pullback to $11 to $10.50 if it's not ready, once again.”

eGain

Also in his watchlist is eGain Corp (NASDAQ: EGAN), of which he owns 6,000 shares bought at an average price of $3.41.

“I really like how this closed well off the lows and put in a hammer candle, and it held both the 20-day and 50-day moving averages on Tuesday,” he wrote. The company witnessed some insider buying in after-hours; a director exercised some options to acquire 50,000 shares at $3.74, Pedone explained.

"If I'm right," he said, "those previous block trades will start to bring in more volume and better liquidity soon. I'm looking for this to clear $3.92 and then $4.20 with volume.”

Pedone thinks this stock has an excellent chance to “fill that gap from February, so be ready if the volume picks up and this wants to trend. The float is low here at 14 million shares, so the potential for an explosive move is in play."

Posted-In: Roberto PedoneAnalyst Color Technicals Trading Ideas

 

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