FDML Chart – Getting Tempting

I charted Federal Mogul Corp (NASDAQ:FDML) when it was trading at $17.76 this afternoon.  FDML came onto my radar from reading about it in this week’s Barron’s as one of Mario Gabelli’s top picks.  It’s down almost 3% today, but found support this morning at a horizontal line of previous intraday lows from the past couple of weeks. That intraday low also happened to be in line with an old/short trend line from December.  If today’s low holds, that trend line could become more important and worth following.  FDML has a third trend line for the same low point this morning.  This third line was the trend line of higher highs for months and has acted as support once after resistance broke.  That’s probably my favorite line on this chart and I expect it to hold.

If support from those trend lines breaks, FDML could fall as deep as $16 before it finds the next area of support, then down to $14.  If FDML makes it as low as the bottom trend line below $12 I would think this would be the time I’d have to consider moving a large portion of my portfolio to it.  Based on the chart I think the next likely move for FDML is higher from here.