breakaway gap vs. supposed island reversal
TRBDFhttp://www.iqc.com/chart/default.asp?period=180&time=60m&chart=candle&chart1=ma&volume=y&stochastics=y&symbol=trbdfTechnical Chart - TRBDFhttp://www.iqc.com/chart/default.asp?period=180&time=60m&chart=candle&chart1=ma&volume=y&stochastics=y&symbol=trbdf
techmaster, sigmund, & james s. have opined that the April 20 gap from 5.81 to 8 or so must be filled.
I took my first gain that day at 7 7/16 (foolish me) as the stock's gap exceeded my first target.
Lest those who are inclined toward TA totally show themselves to be
idiots (Time and the Tape always tell), I'd still like to reiterate
that the recent action is not a "classic island reversal" but a
breakaway gap that may never be filled.
Some posture and hope to be able to buy at lower levels (the low 6s?:) )
. The facts: 4/20, 4/24, 4/29, and 5/1 were days with significant selling pressure,
but the stock never fell into the gap below the profittaking on 4/20 at 4 3/8.
04/20/98 4,036,000 8 5/16 7 3/8 8 1/8
04/21/98 2,018,700 8 11/16 8 1/16 8 1/2
04/22/98 1,826,000 9 1/4 8 3/4 9 1/4
04/23/98 2,341,300 10 9/16 9 11/16 10 1/4
04/24/98 4,276,400 10 13/16 8 1/8 9 3/16
04/27/98 3,733,300 10 7/16 8 3/4 10
04/28/98 2,194,500 10 1/8 8 7/8 9 9/16
04/29/98 1,943,700 9 7/16 8 1/4 9
04/30/98 866,900 9 3/8 8 1/2 8 9/16
05/01/98 1,249,900 8 5/8 7 3/4 8 1/8
Think about professional managers who haven't wanted to chase the
stock price even though the prospects for the future are compelling.
They are taking everything that short term players want to give when the shares dip into the 7s.
John Murphy (Technical Analysis of the Futures Markets) usually sees the island reversal as a reversal of trend.
If you draw a trendline using the slope from the chart's bottom in early April for two weeks you will see that the last three days action are a continuation of the upward trend along the same slope. Noone disputes that there was some "overexuberance".
The height of the fervor and largest amplitude swing was on Friday April 24. Draw a downtrend from succeeding highs and you will find that action in the last two days signals an end to that correction.
I erroneously predicted a symmetrical triangle with an apex at 9.5. The 4x10 to the 1st news took out that figure to the downside.
I believe we are back into a continuation sequence that will be broken to the upside with the next news, that is, news of real significance that will auger profit to the bottom line.
Those who have asked for numbers to evaluate the company should call investor relations at Woodland Hills, CA
(800) 350-2031 and ask for a package. There are a couple of reports that run potential numbers.
If you caught the Ware interview you will know that it is next year but really the following when the profits will hit bigtime.
Long term players will be happy to pony up 8,9 or 10 for a triple or quadruple in, what for them, is a short time period (18mo. to 2 years).
The battleground is in the mid 10s. We will need to beWare of the real news to break into new high ground :)
It's been said that the market looks out 18 months. This is not KTEL or ENMD. TRBD soon to lose the F is not that overvalued.
obviously imo. good luck. |
