To: +Peg Coleman (1224 )
From: +Dave H Sunday, Jan 4 1998 5:17PM EST
Reply # of 1262
VVID -- Some TA......
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VVID closed on 1/2/98 at 16 3/8
The Chart:
VVID doesn't have much history, IPOing just over a year ago. It quickly
made it's all time high on 2/24/97 on 24 1/2, and then spent the ensuing
months in a downtrend, reaching a low of 10 3/8 on 10/28/97 before
quickly recovering to the 15-16 levels, which is where VVID is now.
At first glance the chart doesn't look like anything special; however,
after studying it for a while, I have been beginning to see some
interesting stuff.
1) Almost every major downtrend in the chart has been taken out at this
point. The only one I'm still concerned about it is the one using the
highs from 5/29/97 and 9/10/97, confirmed again by the highs on 11/6 &
11/11. VVID is now above this downtrending line but did so due to more
sidewise movement and not from a real breakout.
This line is at around 15 3/8 now, so it seems VVID has been successful
in passing it by. Why did it not have problems with this line? See #2!
2) VVID seems to have created a mini high tight flag from the bottom on
10/28/97 of 10 3/8 -- it rose in 7 trading days to an intraday high of
16 1/2, and since then I think the ensuing action has been reasonably
tight. I say "mini" because usually high tight flags are doubling
events; in this case, I see the flag as the half way point to an
ultimate goal of around 20.
3) Further supporting the mini-high tight flag is an ascending triangle,
with the horizontal part of the triangle at 16, and a series of higher
lows pushing up against 16 since 12/5/97. Most of the time, when you
have a right triangle (meaning one side is staying at the same level)
you are seeing more and more buying & accumulation as buyers are slowly
overtaking sellers.
Over the last two trading days, VVID has actually pushed up over 16 and
is now using 16 3/8 as upper resistance. I expect it to bump that up to
16 1/2 very soon. As long as the trading range remains tight and 16 1/2
proves strong resistance until a real breakout occurs, I still feel
comfortable with the ascending triangle formation.
At this point, the safest time to buy VVID will be a true breakout over
the 16 1/2 level. VVID's 3 month volume daily average is about 65k. Look
for 2-3 times that at least for a good breakout over 16 1/2 to stick.
Next stop for VVID would be a quick rise to 20.
On the other hand, any intraday action below 15 1/4 would lead me to
feel that the mini-HTF & ascending triangle has broken down.
Also, if price keeps creeping up on small volume, this would also
threaten to invalidate the two price patterns.
The technicals:
SMI values look extremely strong right now -- not as high as the initial
all-time high, but considerably higher than the high made in may 1997 of
almost 20; this indicator seems to be showing that VVID could make a big
move in the very near future.
Stochastics: 89,3,5 is at the highest levels in VVID's history at almost
75; (my first readings start 89 days into VVIDs history, of course so it
misses the first giant peak...) So while the value isn't above 80, this
is very bullish nonetheless.
Shorter term stochastics show a mixed picture, with the 13,8,8 in a
slight downturn, but the very short stochastics (2,2,2), (2,1,2) have
just bottomed out and are looking to turn around.
longer term CCI values are difficult to interpret given the short
trading history, but the short term stuff looks great -- the 13 day CCI
is at the highest values ever, about at the level of when the all-time
high in price was made. right now the 13 day cci is well over 150, and
this level hasn't been achieved since the all-time high in price was
made. 21 day CCI is just crossing 100, and the more important 89 day CCI
is over 50, well under the bullish level of 100 but it's also at the
highest value I can see given the history of VVID after the first 89
days of trade.
34 day Bolinger bands are quite tight, and the 34 day RSI is over 50 but
below 60, giving lots of room for upward movement without becoming
overbought. 13 day bolinger bands are also tightening up with RSI almost
at 60 which is where the 13 day RSI was when the initial run to the all
time high happened. 3 day RSI, well above 80, looks in the overbought
area to me, with the 3 day Bolingers coming off as tight as they can get
a couple days ago. This might imply a small drop in price; looking at
the chart and trendlines I could see a bounce off 15 3/4 or even a
couple ticks below.
Overall, VVID looks like it is on the cusp of a big move, and the
technicals seem to support that the move will be up.
I would use 15 1/4 as the lower limit as a stop loss, because breaking
through that throws serious doubt on the previously described pattern
formations. However, most of what I see points to a move sometime in the
next week that could bring the stock up to the 20 level within 1-2
weeks.
dave |
