Scott,
"...The dip below the trendline occured on a generalized bad tech/market day - question is, do you factor this into the equation subjectively, or do you go with objective TA?"
I've learned to factor big market movements into the equation subjectively, such as the day when Visio(VSIO) experienced a market-driven Bull Trap on 1/9/98. The stock bounced back nicely in the near term after the short term market effects were shaken out, but eventually, the individual issue's own fundamentals(separate from the broad market's) caused it to re-experience the Bull Trap (from which there has been no recovery since).
Rules are rules, however. Equinox has had plenty of days since it broke the intermediate term upward trend to recover, yet it still hasn't. Remember Sperandeo's rules on drawing the trendlines--there really is no way around them.
The short term trend-following indicators remain negative, but based on stochastics, it could be nearing oversold levels. I don't like mixed signals, however, since they don't help very much. BTW, the stock now has a short-term downtrend it has to break out of in order to make the trading characteristics of the stock more attractive.
This is the first week since the stock closed at $9.00 that one of my long range indicators have turned cautious. It's not 100% reliable, but it is one of the more trusted Expert Indicators from Omega Research I look to. The good part is that based on the momentum characteristics of the stock, a peak doesn't seem to have been reached just yet, so there could still be a possibility of this continuing to move up. The fundamentals of the company certainly dictate that such a move is possible.
Regards,
Rainier |
