AR,
Thank you for you very informative analysis. It gives me food for thought.
Yes, there is reverse head and shoulder pattern developing with the neck line just above $4.00/share. This formation has been forming since July 97, with the right shoulder 10 weeks shorter than the left shoulder. These shoulders do not necessarily have to be equal, but they should be nearly so. In which case, the right shoulder will not be in completion until the end of September. Then the stock price will need to penetrate $4.25 on a closing basis. Right now it's having difficulty getting through $3.50.
It's important to know that head and shoulder patterns don't always work. If and when it happens, there must be a high volume upside penetration of the $4.25 neckline.
As of the present time (2:30 PM EDT), LCAV is trading at $3 1/16 (low for the day) at 39,800 shares. With this move, a sell signal was given. With the short and intermediate technical indicators in a sell pattern and the long term indicators neutral, look for a retest of $2.875. If the subsequent sell off of this issue is accompanied by low volume with out a high volume bounce back to $3.00, we could be in for a long dry period and possible move to lower prices.
If on the other hand, volume picks up in the $2.875 area with upward price trend reversal, this stock could recover. I'm a little concerned at this late date (close to the earnings release date), that the stock is performing so poorly. "Big Money" (those in the know) generally give a clue to the expected news release by buying on good news or selling on bad. Consequently with the poor performance to date, IMO the earnings will not be as good as expected. We still have over a week until the earnings will be published, and things can change so lets monitor the trading activity very closely to know which way the price will go.
Harry |
