NVE Corp.'s Tight Trading Helps Its Base

• Patrick Cain
• On 6:41 pm EDT, Wednesday September 9, 2009

NVE Corp. is a thinly traded stock with a strong base.

The maker of sensors for pacemakers, hearing aids and other small devices started to base on July 27 after a powerful rebound off the 10-week moving average.

So far, the base is in its seventh week. In that time it has twice found support at the 10-week line.

The pattern is a flat base. The second bottom barely undercut the first. That gives NVE a potential buy point 15f 56.96, which it passed Wednesday.

Volume has been light in the base: Only one week had above-average volume. It was a week of accumulation, but that week was barely above average.

The base has tight-closing weeks. The weeks from Aug. 21 to Sept. 4 finished within 1% of each other. That's similar to a three-weeks-tight pattern, a follow-on formation sometimes seen after a breakout. Right before this stretch there were three interesting down weeks.

The last two of those closed in the upper 60% of their ranges. One saw slightly higher volume, making it a week of accumulation. Both weeks closed with declines of 0.7% and 1.2% -- pretty tight action.

NVE's Relative Strength line is starting to trend up as well. It's not at or near a new high yet.

Buzz up!