[AMTX Technical "Buy Signal"]
I put a daily chart of AMTX since September 1995, along with a 16 day stochastics oscillator, up at:
4w.com
The oscillator has just rendered its first "buy signal" in over three months by first dropping below the solid horizontal line at 20, then rising above the dotted line. (You can see the latter more clearly on the small inset chart.)
Given all the limitations of technical analysis, I always use quotation marks around the phrases "buy signal" and "sell signal", to remind people of their impreciseness. Nevertheless, I think the "buy signal" in AMTX leads to some interesting conclusions.
1. AMTX is more oversold now than it was overbought at its May 1996 and September 1996 tops. The stock thus has a very good "window of opportunity" to rally here.
2. What AMTX does with that "window of opportunity" will tell us a lot; technically, it could stage anything from a barn-burning rally through a rally that takes the stock back to resistance just above 12 to something even less than that. However, since the last two "buy signals" (in last November and early January) led to only minimal rallies, it would help the stock's cause a lot if it staged something more than just a "dead cat bounce" here.
3. Fundamentals ALWAYS outweigh technical factors, so what Pat, JW@KSC, et al share with us in the next few weeks will determine just what kind of rally (if any) the stock will actually stage a lot more than any technical "buy signal".
4. Finally, from a short-term standpoint AMTX is currently in a pretty stiff short-term downtrend, and it will take a close above 8 7/8 to reverse that downtrend and confirm the "buy signal". Unless and until that happens, the stock will, at best, remain in a basing area.
The bottom line, though, is that the Amati bulls look like they're about to get a chance to run with the ball again, and it will be very interesting (and, perhaps, very profitable) to see just what they can do with their opportunity. (Especially given what the bears did on their last possession.)
Just some thoughts, for what they're worth...
-- Walt Deemer |
