question for sellers, page-8

Hi Stoss69,

I must admit the chart still has me worried - at least in the short term. It is hard to accept this latest sell off when there is absolutely no fundamental reasoning for it (market cliche I know). There are plenty of other oil/gas stocks which are struggling to even make a profit - but ironically PSA with a $20 SOMETHING MILLION dollar profit gets pummelled down to a PE of 4 today - very weird. Appears these sellers can't see as far ahead as tommorrow - let alone a couple of months when Vermillion production comes on line.

Charting:

Fibonnaci analysis first:

There are two time frames I can see - the LARGER and the SMALLER.

(1) the LARGER time frame (using the Nov '02 24c low and recent $1.72 high)

Today the $1.15 (38.2%) fibbonacci support failed. There was a swift sell down to $1.03 (although only one trade at this price) before a rebound to $1.10ish.
Now that 38.2% support has failed, the next support is is $0.98 which is 50% fib level.
(Note that $0.98 correlates with a "price gap" between $0.97 and $1.02 which was formed when the broker placement was made prior to Christmas. This gap came close to being filled today, but fell short by one cent. This is concerning, because now there is still the possibility of another fall in order to fill the gap.)

So - 98c is the next support using this LARGER pattern. I am not sure when (and indeed if) this will happen. There will probably be a recovery bounce in the next couple of days. My guess is to $1.22 maybe by COB Friday.

If 50% fib at 98c fails then we are looking at 80.5c (61.8% fib).. gulp.. fundamentally I just I can't see this occurring. Maybe a panic selloff if China doesn't go ahead or something might trigger this...the odds in my view are very low...anyway thats the next support level if 98c breaks.


The GOOD news:

On the SMALLER pattern (using Sep '03 64c low and the recent $1.72 high)
The price found support at the 61.8% retracement at $1.05 today. This is good news because many stocks will reverse their trends at 61.8% fib. There was only one trade below this at $1.03, but it still counts as finding support at $1.05 in my book.

The 180day EMA and the 200 day SMA are at around $1.09, so at todays $1.10 closing price - sitting on support here.

Other good news is that todays close was inside the Bollinger band (only just). A close outside the BB would have been a further case for more falls.

Also if one looks at the daily volumes - the volume has been lower each time during the waves of selling the last two weeks. Can't be too many sellers left prepared to let these go so cheap - surely...

All in all there is a good case for a bottom at $1.03 - but I still don't feel great about it in the short term - AT ALL.


Hope this helps,



Christian