TA Opinion If You Want It –
Without being able to look at the chart, it is a little concerning to see BIDS bounce off 11-1/8; however, although it has penetrated the C$23 support, it has not closed below the support. Some TAs believe that significant penetration at the close is a better indicator than intraday action, in order to filter whipsaws. Others employ a time filter, where a common time filter is the two-day rule, where prices "must close beyond the trendline for two successive days. To break an up trendline, therefore, prices must close under the trendline two days in a row. A one day violation would not count. The 1-3% rule and the two-day rule are also applied to the breaking of important support and resistance levels..."¹
BIDS would have to close at or below C20.15/US13.45 in order for it to be considered significant (3%) penetration, or below C20.75/US13.85 for two days in a row, to constitute a breaking of a trendline; furthermore, it would need to close at or below C17.10/US11.40 for significant penetration, or below C17.60/US11.75 for two days, for a breaking of support.*
At 13.75 RT, we are not far off to having a close over those bars.
I have created (yet another) graph to illustrate this:
members.home.net
Myself, with a stock like BIDS, I believe both penetration criteria should be used in this instance, given the current state of the Nasdaq and the condition that this is indeed a big day for the stock.
Denise.
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¹ Murphy, John. Technical Analysis of the Financial Markets, p71-72
* CAD @ 1.5 = USD |
