Hi Scott,
I sold most of my stock in the $9.50 area because the stock was acting sickly. Despite heavy volume, the stock was not able to make any upwards progress and then started to fall on heavy volume.
BRLC has broken many levels of support recently. One of the most critical was yesterday's drop below the 50-day MA. If you look at the chart, you will see that it was holding at $9, and then based on a variety of factors - misconception about the DigiMedia IPO announcement, weakness in the Nasdaq, etc - broke significantly below that on heavy volume. I bought some shares yesterday with the hopes that we would rebound from the $9 support, but was caught in the downdraft. I was then hoping for some kind of recovery at the end of the day to above the 50-day MA, but that didn't materialize. Had that happened, I would have been buying in force late yesterday or first thing this AM.
Now, looking at the chart, particularly today's chart, we see a potential doji reversal or a hammer reversal. However, typically one would like to see heavy volume as it indicates climactic panic selling as the remaining weak hands get flushed out, and are replaced by strong hands. It is still early in the day, but to be a true reversal, you would want to see a lot more volume. But the reason I didn't sell yesterday PM was that we have been in an extended slide and certain indicators were showing that the stock was oversold and that we should be due for a bump.
Looking at the chart, I am of the belief that we will have a short term rally. We will not get close to the former high of $11.60, however. I strongly believe that this will be the time to exit the stock because I think we will see another fall below the $7.5 low we hit today. The stock is in distribution mode and in a corrective cycle. I am hoping to hit the $9.50 range and get out.
Again, if today's volume was much higher and we had this potential hammer reversal, I would be buying today. But there is enough uncertainty in my mind that I will stay on the sidelines and hope that a rally materializes.
Good luck!
Tom |
