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Strategies & Market Trends : YEEHAW CANDIDATES -- Ignore unavailable to you. Want to Upgrade?

To: Galirayo who wrote (16985)	3/29/2006 9:56:11 PM
From: Ken W	Read Replies (2) \| Respond to of 23958

Ray HLIT: You asked for me to explain how I came up with 6.25 as an re entry target, here is a stab at it. LOL Daily chart: stockcharts.com The up gap was from some sort of press release, an upgrade as I recall, and one could amost call it a breakaway, but note that it is just above all the moving averages, nothing to support the price above the gap. RSI and STO's have both given off a sell signal. Also of note is that it takes 10 to 15 days for STO's to become overbought or oversold with a 3 to 4 day consolidtion period before either the next upswing or downswing. Given that the 20dEMA is on the uptrend at 6.02 it will continue to improve as the price comes down to it. Figure in each days' closing price for 13 days and the 20 should be just about 6.25...Now the weekly to comfirm. stockcharts.com Again, note that the 20Wema is improving, but the 50 needs to begin improving also, both are under the 144 (or in some cases 200MA) Like you said it banged hard on the 144 due to the overbought conditions of the daily chart. RSI will need to come down to the 50 line and bounce as the STO's begin to come into the 75 area..Now look at the horizontal support line just about 6.25ish, there are at least 12 weeks that the stock was at, just above or just under 6.25...that coupled with the gap to fill, the 20dEMA and timing of overbought going to oversold makes me think that 6.25 is a pretty good bet. I would expect that it will trade in a range between 6.25 to 6.95, 6.9, 6.80 etc. then continue to narrow until a triangle is formed then either break up thru the top or down thru the bottom....It's important that the 6 to 6.25 area hold for the horizontal bottom of the triangle during this process. Ken