CYMI has made a parabolic move this year and now is retracing a good deal of that. A similar situation took place with IOM, and if you compare the charts, they are very similar. IOM has produced quarter after quarter, and has languished in a base since July 1996, and has only recently been coming out of that base. The technical damage to the chart on CYMI is huge. Support is 22, 18 and 16. Note the short interest in both CYMI and IOM was very large when they were going parbolic. I would expect CYMI to bottom and then consolidate for a long period. The move up will be long and difficult, as CYMI now is faced with a situation it never had before, overhead supply, meaning there are many people who will be happy to sell once they are even.
I have changed my mind about tomorrow. I am going to buy tomorrow most likely at the open, but only for a trade, and only if the gap down occurs. I am not going to build a position in this one until the technicals start to improve. I will only trade it. The reasoning is that this stock needs to consolidate, and also, the market weakness concerns me, and I don't want to hold much of anything right now. |
