Core-Mark's Chart Sketches Mixed Picture

• Paul Whitfield
• On 6:37 pm EDT, Friday October 9, 2009

Core-Mark Holding (NasdaqGS:CORE - News) has been working on a flat base since meeting resistance just short of a 52-week high in August.

The San Francisco-based company distributes cigarettes, candy, soft drinks and other items to more than 24,000 convenience stores and retailers in the U.S. and Canada.

The stock has corrected 11% within the base, which is normal for a flat base.

The minimum length for a flat base is five weeks. Core-Mark's base is at the seven-week mark.

A textbook flat base is known for tight trading ranges. Core-Mark generally meets that standard. On the daily chart, it shows some extremely tight trading in September.

The potential buy point 19 the left-side high plus 10 cents, or 30.22. It needs to clear it in fast trade to validate the buy point.

However, this flat base has some drawbacks.

Volume should dry up at least slightly in a flat base. On this point, Core-Mark's chart is less convincing. There are many days of above-average trading on both the upside and downside within the base.

Part of the problem is that Core-Mark is thinly traded, the type of stock that institutions avoid.

That alone would make many disciplined investors wary.

Buzz up!