For what its worth, and for those of you interested in technical analysis, LEAP appears to have formed a nicely defined declining triangle.
The current pattern goes back to mid-April (shortly after the pump and dump), and shows a base of around 2 3/8 to 2 1/2 with declining volume and declining peaks. The first peak off the base was at 4 3/4 early during the week of April 17th. Each successive peak is lower than the last, with the last peak at 3 earlier this week. If you look at the chart, the top of each peak generally falls on a straight but declining line which defines the top of the triangle.
Normally, a declining triangle is a very bearish chart formation and indicates the likelihood (but not the certainty) that the price eventually will drop below the base and fall approximately as low below the peak as it's highest, initial peak was above the base. In other words, if this pattern follows through, it suggests that LEAP will drop below $1 sometime in the near future.
That's the bad news.
Now here's the good news. LEAP appears to be extending the declining triangle to its apex. In other words, the peaks are becoming very narrow and close to the base. When this happens, the power of a declining triangle to predict a breakout on the downside becomes very suspect. Instead, a declining triangle which extends more than 75% of the way to its apex (as is the case here) can just as easily break out on the upside as it can break out on the downside. Thus, there is no upside or downside pressure (below 2 3/8) at this time on LEAP.
Because there is no strong technical pressure on LEAP to go up or down at this time, the upcoming earnings report clearly will determine the direction of LEAP for the foreseeable future. (Sometimes, the technical trends can overcome or mitigate the importance of an earnings report.)
For those of you who have stuck it out through this declining triangle, I truly hope you see a positive report and a good bounce up. I don't see any strong resistance anymore against an upward move (although there will be a lot of profit taking and resistance as LEAP moves toward 4). However, I don't believe this will happen absent a good earnings report, and if earnings are not good, LEAP will drop like a rock.
Place your bets and enjoy the ride!
-- Jim Wright |
