Michael,
Thanks for the URL for Zacks Hot Stocks. I have the report through the courtesy of Philip Maun also on this thread.
I am using short, intermediate, and long term momentum indicators, which tell their own stories either in concert with or independent of the related bar chart. The momentum indicator is basically an oscillator which might or might not be in phase with the high or low of the price trend. If it is in phase indicates a confirmation of the price move, while out of phase or diminished amplitude indicates a contrary move vis-a-vis the price pattern, which is preliminary to a change in trend. The succession of oscillator highs and lows effective describe a trend, either positive (bullish trend), or negative (bearish trend).
In this analysis, I am using the short term indicator which currently (5/12/97) shows the formation of a second leg of a double bottom pattern, but in a negative trending price pattern. This in combination to the relative drop off in volume, indicates a potential price trend reversal, but with little investor support. In other words the stock price is trying to hold at the recent low of $4.25 (which corresponds to the 233(*) day Weighted Moving Average [WMA]of $4.375), and is exspected to change direction. The current price resistance is $5.50.
In regards to my momentum indicators, it is important to note that when I indicate a momemtum indicator pattern or trend, this might or might not be reflected or agree with the price pattern.
The On Balance Volume (OBV) Indicator has also turned down at this juncture which confirms the negative trending short term momtentum indicator.
In my opinion, any resumption of the upward price move of this stock is unlikely at this time until a positive price trend can be established. We might get a near term upward movement in price, but it will not carry above $5.50 (IMO).
The "drop down to about 4 during the second week in April", you mentioned in your post, was $4.25 on 4/11/97. This was the second leg of a 'W' pattern; the first leg occurring on 4/4/97.
Note:(*) Fibonacci number of 233 day average which works better than the 200 day average.
Regards,
Harry |
