Hi Gush,
There are definite technical sell signals now, but the volume has been unimpressive. I don't yet see significant downside momentum, but there IS strong upside momentum that is currently being digested.
I'd say it's unlikely that ISLE will trade down as low as $22. That would mean a serious breach of support from the rising 40 ema (at $24.04), then the lower rail of the BBs just below that. I think it more likely that together these two support levels should hold. Below that, there's pretty good chart support at $23.12.
That very bullish volume-heavy white candle also represents solid support. The volume on that candle (and the previous reversal candle) dwarfs the current daily volumes, which tells me the bulls are in firm control and will draw a line in the sand at some point if the bears try to push it down. So there is a great surplus of supportive volume; the volumes at the peaks (resistive volume) were much less. So from a volume perspective, there is strong support below, and not a lot of resistance overhead ($26 is chart resistance from late March/early April, and $28 is more recent chart resistance; above that is blue sky).
Also, usually, there is support near the middle of the real body of such a candle, and in the case of ISLE, this was successfully tested during early December (about $23.75). I think it is most likely this level of support will not be broken.
So... bottom line, early in the week ISLE will likely trade down to test these support levels, but should rally off the test. That would make an upside break and expansion of the BBs upwards likely.
T |
