Well, lets see:
Seven sessions ago, FAS was turned away from a test of overhead at the 100 ema. This was only the beginning.
Then, last Tuesday, FAS failed at support at the 100 sma, and was also turned away from the upper rail of the BBs.
The next day, it failed at support from a 2-month trendline, and support from the 50 ema.
On Friday, FAS failed again at the 50 ema support level.
FAS also failed at more important support from the midline of the BBs ($8.90).
So in sum, in the past week FAS has failed at 6 consecutive levels of important support.
If that's not enough, downward momentum is building. For example, there are clear technical sell signals across the board. ADX indicates a marked weakening, and an impending reversal of trend. The broader indexes, market internals, and sentiment (put/call) all indicate a correction is underway.
Given that, I expect FAS to continue in this vein. In 2 weeks, FAS will most likely be at the upper level of a rather broad zone of support that from top to bottom currently stands at:
1. $7.96--40 sma
2. $7.50--chart support
3. $7.30--50 sma
4. $5.92--lower rail of the BBs
So I anticipate that 2 weeks from now, FAS will be trading around the 50 sma, which is currently $7.30. That would be a drop of about 16% from current levels.
Terry |
