TA update ...
For previous technical discussion that this update pertains to see Message 13266160.
Despite the current retracement from the 3/8 high, the trendline is still up at about a 50 degree angle. BOP is still 100%, where it has been since 2/17. The TSV went negative on 3/20, but crossed back to positive and trended up for two days -- against the pricing decline. This divergence indicates strength is still in the stock on the demand side. TSV did start declining on the 3/24 close.
Stochastics (%K) fell close to 20 at the close on 3/24. I was expecting it to start turning up at that time, but there was more selling than buying, on lower volume. Nonetheless, the stock is oversold and will hopefully hold support, currently around 7.
A flag formation has developed in the last couple of trading days. The price has bounced off the upper and lower boundary of the flag four times. (I incorrectly reported it had bounced five times in a previous post. This was due to using a Moneystream point rather than the day high on a when looking at the chart). In any case, the flag formation generally indicates a break-out is in the cards. The price will need to bounce off the top or bottom flag boundary one more time to meet the rule of five. Once that happens, a close outside the upper or lower boundary will signal a breakout. This could take a day or another week or so.
Given the current pricing pattern and momentum, I believe the stock will breakout to the upside. However, that is not a given. If it falls through the flag at the bottom, the next level of support is around 5.75. Thus, the next few days will be critical and the price should be watched like a hawk. The current top boundary is around 8.13; the bottom boundary is 7.13.
The volume is still tracking closely with the volume shown during previous retracements and the stock has closed up on lesser volume.
Based on the above, I believe the positives still outweigh the negatives. However, I will be watching the price closely in order to meet my 15% stop loss should it fall below that lower flag boundary. At that time, I will reassess the next move. I hope that doesn't happen.
The above is based strictly on what I may or may not know about Zen and the art of reading tea leaves. |
