weekend charting 22/01/10, page-22

RFE

There are two distinctive features on the longer term chart:
- the megaphone (blue lines)
- the steep downtrend channel (red lines)

The megaphone looked redundant when GFC caused chart to fall out in late '08.
But it came back, all the way to the top of the extended megaphone! which keeps the megaphone lines alive.
So I would expect the bottom of megaphone to support the fall if 75c fails to hold. If not, then there is horizontal support at about 40c.
But surely you'd be out before then.

Alternatively, any break to the upside of the red downtrend channel shouldn't be ignored as it could be a sign of a change of trend.

Finally, on a closer look at the chart, the last two candles are know as hammers and suggest rejection of lower prices.

Cheers,
10cents