Re my last chart post on HZR, the bullish pennant pattern SP target of 45c was achieved today. I thought I’d brag a bit as it isn’t that often that these Fib targets are achieved. The real target of course was around the 42c level. To answer the question as to why 42c you have to look at the price and volume action history on the chart, see daily chart shown below.
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I’m not sure as to whether it was the same professional groups, or “Smart Money”, that sold out up around the 55c level back in late November 2017, but someone stepped back in on ultra-high volume on 09/04 effectively stopping the down trend in the SP. Prior to this some relatively high volume buying did come in on 01/03 at the 42c level. On 19/07 the professional groups couldn’t resist the lower prices and once again soaked up supply on relatively very high volume. This strength in the background set the scene for the recent SP rise. So the bullish pennant pattern proved successful and the SP rise effectively stopped around the 42c level, the old relatively high volume buying level which became a resistance level. This stall in the SP rise occurred on 24/09 with the Professional Groups selling into strength on relatively high volume at a level they probably had earmarked for taking part profits.
It should be noted that the majority of this high volume buying and selling occurs when the WaveTrend momentum oscillator is at oversold or overbought levels. The question now is in which direction the SP will go in the future. The WaveTrend indicator is now overbought, but it isn’t unusual for these types of oscillators staying in an overbought state during a strong uptrend. If the “Smart Money” is still holding shares their next target profit level would be back above the 52c level where the selling came in way back in December 2017. In the best case scenario the SP is now forming another bullish pennant setup. I’ve drawn some possible pennant lines on the chart (just a guess at this stage). The breakout level of the previous pennant was at the high of the high volume up candle of 04/09. If a similar breakout occurred in the current tentative pennant pattern the SP Fib target level would be around 52c. This level once again lines up well with previous high volume price action levels. On the downside I would be looking for the low of the high volume up candle of 24/09 at 38c to hold. Below this the 200 SMA level at 35c would be the next level of support.
Just another way of looking at an SP’s price and volume action. Good luck everyone. All IMO of course.
(20min delay)