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Gold/Mining/Energy : Winspear Resources
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To: Sudhir Khanna who wrote (23731)7/27/1999 11:26:00 PM
From: Charles Kalb  Read Replies (3) of 26850
 
To All.......I don't believe I saw a single post acknowledging that we didn't have the follow-through price drop today that many were expecting, myself included. The only explanation I can come up with is that we may actually have put in a local bottom yesterday. From a TA standpoint, today's price action was a narrow-range day with a Doji-star candlestick (open = close), both of which often occur at reversal points. Tomorrow's close would need to be above today's 2.93 close to confirm the Doji bottom.

Brian has pointed out the 2.56 support area at the previous low on February 4, but there is another kind of support that often comes into play before the major potential support levels, and that is the statistical constraints provided by error channels. I plotted a regression line which starts at May 19, the day before the 7-day run to the 5.30 high. With plus/minus two standard errors the resulting channel contains all the price action except for a few cents of the 3.20-low selloff day and yesterday's low of 2.75 which fell a little bit below the lower band. Prices going a bit outside the bands is perfectly okay and is often used to signal overbought/oversold points.

Pending a confirmation of a bottom tomorrow, we could see a slow, erratic climb to 3.47 or 3.70 levels (based on 38.2 or 50% Fibonacci levels), but then a resumption of the decline because a downtrending channel is now in place (lower highs and lower lows). A significant change in fundamentals of course could change this scenario. I'm not trying to be Nostradamus here, just giving my best stab at the TA as it stands NOW.
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