Good stuff HD, I still cant work with them yet. If I convert my scribbles to candle volume they look more like a birds nest than they usually do.
Here are my thoughts for the next week for what they r worth.
It will take an announcement of a deal or similar to create enough momentum to break out of box 6.
Fridays quick rise & sell off was probably by traders who jumped in early Thursday after the article in the Australian & rode it up to Fridays high before taking their profits and either sucking in new traders or re-buying on the way on the way down.
Anyone buying at the present time and while the sp is anywhere in box 6 will never regret it.
Once we break up from this box there will be no going back ever.
I believe that the gap way down around $0.064 will now never be filled.
If this week’s example of what the sp can do with a news article stating old news is any indication then look out above when they actually sign a deal & release that.
The daily chart shows a shooting star candle has formed.
The volume Thursday & Friday was 4 times the 34 day average.
We have closed at the midpoint support of box 6 on $0.135, this is support on the daily & resistance on the weekly chart.
So.
Based on the candle, what I would expect to see early next week is a sell off initially, maybe down to $0.115 then some attempt to break up through the middle of the box again.
Why?
As shown on the chart there have been 6 of these shooting stars over the last 9 months that were followed shortly after by a sell off resulting in the nearest support failing to hold up.
Three of the last 4 shooting stars & sell offs happened after a volume spike.
Therefore I like the odds of it happening again.
A sell off or settling period will not be a bad thing though & I think it would be limited.
Not all of these candle patterns resulted in immediate sell offs though. Some were followed by a period of sideways trading / consolidation.
So (This is my each way bet)
What I HOPE to see next week is for the sp to consolidation in the top half of box 6 in the $0.135 to $0.165 range prior to a follow up announcement by the company.
Why?
Because I think the markets expectations of an announcement are now higher than ever.
Heaven help us if they don’t come up with the goods this time.
The chart shows what happens when they fail to back up the talk.
It’s interesting to note that the previous volume spikes were very close to the time an announcement happened & the sell offs were a few days to a week or two after, when no follow up was forthcoming.
The nearest daily support I see if a sell off happens is at $0.125. This roughly corresponds to two of my rising trend lines.
Next one down is $0.115 which corresponds to the weekly support.
Either way I don’t expect the sp to fall below $0.115.
I have drawn a box in the weekly chart now. The box range from $0.095 to $0.165 is $0.07. Support is at $0.115 and resistance at $0.135.
Fridays close shows the sp retreating from the resistance at $0.135.
The weekly is also showing that we are still in a down trend
Getting closer now & the excitement is building.
Hang in there wont be long now.
.
