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Sgt.Pepper
I'm glad to see another poster interested in technical indicators, although, you could have saved the insult.
Perhaps you are right. When I said that CORL is still a long way from its EMA, I may have overstated (sometimes I get caught up in the moment). But, in my defense, at that time CORL was 27% less than its 10-day exponential moving average. Indicators change daily with prices though (which is why they are more effective in the short term), and CORL is now trading about 14% below its 10-day EMA ($20.42). It also close to breaking above its 5-day EMA ($18.31), a good sign for longs.
You also refer to the chart as a "classic short covering bounce" and place a target of $25 to $27. I suppose to you are expecting a 50% Retracement, a favorite among many pure chartists. But, in my experience, I have found that 50% Retracements are not very reliable, as they work only about 50% of the time.
The bounce is clear, and expected, which is why I covered my short last week. But I think its premature to say how much strength it will have. Something is amiss though, and I couldn't get myself to short CORL today. You know what they say,....if a stock is supposed to go down (on bad earnings news, for ex.) and it doesn't, its going up. There were also a couple of positive signs today.....the first is that market makers were selling, but they were also buying lots of shares. And though you would think that they were covering shorts, they had opportunities to push CORL's price down (and thus cover more profitably), but didn't. It seems they wouldn't mind letting the stock run a little. Second, the perception of CORL as a LINUX play has shifted in CORL's favor.
Money Flow is still very negative, but has improved a little bit. The problem is that CORL has become too volatile because of the lack of institutional money owning shares. While the signal is still sell, I wouldn't short any until it clearly re-established its down trend. If it can support itself above the 10-day EMA for more than three trading days, then I'll probably go long. My best guess is that its going to be gyrating in a tight range for a while, and most likely difficult to trade in large positions. The next few days should be crucial in determining CORL's price level for the near future.
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