[ Technical Notes for SNRS ]
(The following commentary is based on an intermediate term perspective)
Let's first take a look at the intermediate term chart for SNRS. Since the recent approval for the Nasdaq listing, the tone of the stock's health has significantly improved, breaking past a critical downtrending Trend Line after the price broke through $7.125 on 8/10/98.
From an already short-term overbought state, its gains quickly diminished after a pattern resembling the bearish Shooting Star candlestick developed on the following day (this candlestick also developed on 7/30/98, and was followed by the decline to $6.00).
For your reference, an explanation of the Shooting Star is below:
scifi.co.uk
The next day was met with an attempted rally that failed in the same manner, forming yet another bearish Shooting Star-like pattern. The next day was followed by yet another bearish candle, the Bearish Engulfing:
scifi.co.uk
At this point, one must wonder if the prior breakout was even valid, and if there is any support at the current levels. With regard to the support issue, the answer is Yes. And for the portion regarding the breakout, I provide further details below.
Trend Lines, including the descending variety, can act as a support when it lies beneath the current price. Take a look at where the price is in relation to the prior trend line (see Chart #1):
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As one can see, the previously broken trend line is now sitting right below the current price, and is accompanied the horizontal support level(in magenta) at ~$7.00 and by the exponential 89 day moving average within the same vicinity, at $6.95.
Shorter term signals suggest waiting for further price stability before making an entry on the long side, as the short term downside momentum has not yet subsided, nor has a short term crossover from the AB Channel yet occurred. Let the support validate its own existence before stepping in.
Looking next at Chart #2, we have an intermediate term perspective for the chart.
Based on this set of indicators, one can see the increasing bearishness for SNRS since May. These can be used to explain why I was continually bearish on the issue since that point in time.
A close inspection now reveals, however, a change in trend for these same indicators, which makes me more interested in the recent decline as a possible point of entry.
I've also included a different set of trend lines that indicates a larger Trading Channel for the issue--and that from this Channel the price has not yet broken out of--an interesting case for the Bearish scenario.
The smaller trend line shows also a corresponding support level at $6.45, which also coincides with a longer term moving average in the vicinity. If the price falls further, support at this level would also appear to exist.
Should this bounce around, the near term boundaries are set from $6.50 to $8.00.
Good luck to all.
Regards,
Rainier |
