Chart wise...
Running out of steam on the volume now, with stochastics and ATR having made a nice double top for us... as it met resistance at the 60 and 90 MAs on the daily charts.
In my judgment, that's a fairly significant under-performance relative to what I'd expect to see in a convincing "pop" out of pinch chart breaking the pinch. So, still seeing no reason for calling it anything other than a technical correction in the ongoing decline.
It there were going to be more in it, I'd have expected to see it popping higher than the platform off of which it's latest swan dive began in the first move higher out of the pinch... so, we should have seen it back over $3 at the end of July, with the second peak in stochastics testing $4 and moving higher... where the "neutral" line in the beginning of the formation of the pinch was at $5...
Clearly, the market still isn't close to thinking that it was being under-priced by moving below that line at $5.
Instead, we see it looking really tired now after having made a second effort, with the result being that it has never climbed above the $3 platform...
On the daily charts, MACD leveling off as the wind comes out of the sails... with ADX and stochastics etc already breaking lower... Expect to see MACD rolling over in tow...
"Normal" trading patterns from here will be to see it getting pinched between the 90 and 60 MAs around $2.45 over the next week, before breaking lower to the next support level... then drift...
It's going to take a lot more conviction than is apparent in the market now to allow it to sustain a move higher out of this technical correction out of the pinch.
I don't see any evidence of that sort of conviction in the charts, and I don't see a reason for it to exist in the fundamentals... so... my prior look still looks right to me... I think we'll not see any resolution on a change in the direction of the trade until there is a fundamental reason to expect a change in the direction of the trade will be supported by fundamental performance... For that... we'll first need to get past the ugliness coming in the numbers in the next Q... and then see how things DO shake out in the larger competition for sales of new products this fall...
I remain unconvinced that NOK has turned it around...
I think about the best you can hope for in the near term, in fact, is a hint or two, not proof, that they're going to be able to survive this current product cycle... even if they are not going to thrive...
It may be a year or more from now before there's any real potential to see a proof...
So, I'm still thinking that February or March might be the time to look hard. |
