Just thought I would post a few technical comments on MAN.T, since I have gotten a number of emails requesting my view. I wish I had alot of positive things to say, but MAN is at a make-or-break point in its chart development, and the technical picture (barring something extremely positive on Monday/Tuesday) is not great. Perhaps the best that can be realistically hoped for is a sideways movement along the $6 support level. Anyway, my comments are below, with charts posted as before to
intelligentspeculator.com
MAN on the daily chart is struggling to find a support
level after the sell-off that occurred following the
release of news last week. As can be seen from the
daily chart, Friday's action formed a small hammer at
a price level that coincides with the 20 period
exponential moving average and the base of the action
just before the breakout above $7. Although a hammer
candle can often indicate coming price trend reversals,
they must be confirmed by price action the following day.
Two things are disturbing about this daily chart, and they call
into question the possibility of a reversal. First, the hammer
was quite narrow range, and ended up as a down candle
for the day. This suggests that sentiment is still negative
even at this very important potential support point. Secondly,
the daily chart is drawing a neat little head & shoulder
pattern, complete with a semi-floating head/island
reversal. This suggests that if the $6 level is broken, then
price will fall to the next major support level around $4 -- not
quite a full measuring move for the h&s reversal, but close
enough. Of course, what is currently missing from this
pattern is a well formed right shoulder, so a little bounce
is possible, even though the hourly chart doesn't
indicate the kind of strength we'd like to see for a bounce.
In fact, the hourly chart is now firmly in a short-term
downtrend and testing the nearest support for the second
time. Unless there is immediate strength in price on
Monday, the most likely direction for MAN is through
the $6 level and into a fall towards $4.
Of course, a well timed news release could halt the slide,
but IMHO this is not a good reward:risk point to go long
the stock ... at least not until it can demonstrate that it is
not going to slice through the $6 level. On the other hand,
given that the stock is "in play" and multiple news releases
are expected over the coming weeks and months, this is
definitely not a good short candidate from a risk:reward
perspective. I am currently flat this stock, and will remain
so until the $6 level is proven to be true support. I believe
the trading on Monday/Tuesday will clearly show whether
this is the price level to buy in anticipation of the next
set of news, or if we can get in at a better price. |
