Major TA developments for FEV 01-11-02
Up until the last two trading days of this week, watching FEV’s chart has been like watching a glacier move; e.g., the price action pre-Thursday was confined for eight months to a narrow slightly down-sloping regression channel. Unfortunately for investors, the slow-moving glacier analogy also brought with it the fact that price also “flowed down hill” during that period and much of the prior history. I think the glacier analogy will shortly no longer be appropriate nor relevant.
The past two days have confirmed two major bullish chart formations. I’m looking at both the daily and weekly charts, both with semi-log price scale. Lines are easier to place on the weekly chart because of FEV’s generally light volume and, up to now at least, frequent days not traded.
Weekly Chart
• This week’s close at 0.39 confirms a well-defined year-long Head and Shoulder Bottom with horizontal neckline at 0.38. The price target for this H&S is 0.61, 56 % above the 0.39 close.
• On the way to 0.39 this week, a two-year down trendline back to 01-21-00 was broken to the upside.
• The 200 MA, currently at 0.45, has been above price action since 1995. IMO it is likely to fall next week.
• Perhaps most significant, a Symmetric Triangle Bottom was also confirmed this past week with price targets of 1.55 or 1.64, depending upon whether the formation low is chosen, respectively, on 04-20-01 or 01-15-99. I used the measure rule for Symmetric Triangle Bottoms presented in Bulkowski’s book "Encyclopedia of Chart Patterns", p.545.
• If the 200 MA at 0.45 is taken out shortly, a very long-term down line going back to the 3.055 high on 06-14-96 will be taken out at the same time.
Daily Chart
• Lines are more difficult to place on the daily chart, but the same two bullish formations are present--the H&S Bottom with target of 0.61 and the Symmetric Triangle Bottom with about the same targets as outlined above for the weekly chart.
• Thursday’s close at 0.33 rose just above the 200 MA, and Friday’s close at 0.39 confirmed the H&S Bottom. |
