If the gap is not filled in a timely fashion, lets say within a couple days later, then it will provide a point of resistance to the stock, This resistance line is usually at about the midpoint or at the bottom part of the gap. In CYMIs case it is at the midpoint.
CYMI has hit the strong support at 29 repeatedly. You see how the stock hit this support, went through an energetic bounce, and then came right back to test this support again, all within about a week? This to me indicates bearish sentiment for this stock. Now it has formed two downward gaps as a consequence: the one on 9/08 and 9/22. Much volume transacted those days, and each gap has been validated, so both of these gaps are significant and will provide resistance to upwward movement.
I was going to to say that the stock appeard to have more to go, and I see that it has dropped over 4 more points. This places it below that significant support and above a resistance at 25 which it appears to have bounced off of a bit. This is indeed bas news. It currently has closed below its 200 day MA. I have not looked at today's end of day chart, but it looks like the 50 day MA is downward sloping, and the 200 day MA is either horizontal or downward sloping too.. All this happened after a breakout from amajor corrective price trend fromt he end of January to the midle of March.
All hope is not lost...yet. There is a possability of a good bounce at this point. You will know Monday morning. If this down not happen, then it may consolidate between 25 and 29. Otherwise, it can move past 29 where there are several points of resistance waiting for it, the first significant one being at 34 and another at 38 and another at 45 with some weaker resistance lines inbetween. So I would not expect this stock to make it past 32 in the near future as the more optamistic prospect for this stock. If the bounce happens, then either 25 or 29 will become its new support. The price of 25 will provide a strong support since it would oof been validated by a reaction low.
Bob Graham |
