I thought that I’d start up a 4DS Chart Thread for Long Term Holders that may be interested in initiating or adding to their long term holdings. Like most 4DS thread readers I’m hooked on the potential of the 4DS technology.I became aware of 4DS back in early 2018 via a stock advisory newsletter.I, and I know others as well, am interested in increasing my Investment holdings in 4DS but I want to do this at the best price available.So I decided to take a longer term TA view of the 4DS chart.For me this means analysing the price action on a Weekly Time Frame Chart, see chart below.
This is a candle stick chart with some long term trend support (green) and resistance (red) lines that I have drawn on it.The horizontal thick dotted green lines are an indicator that identifies exceptionally high relative volume Close levels.Below the price panel is a Momentum indicator called the WaveTrend indicator, and in the bottom panel we have Volume.
The TA on this chart is pretty simple but very powerful. The trend lines I drew myself. The only rule you need to remember is that you need at least three price hits on the trend line to confirm that it is in fact a trend line.The long term up-trend (green) line is the one that impressed me the most. We now have five price hits on this line.A very simple strategy for an LTHer to initiate or add to their holdings would be to buy each time the SP approached or bounced off this line.For the more conservative Investor, you could always wait for the SP to break above the easily identified shorter term retrace down-trend (red) resistance lines. Looking at the WaveTrend Momentum indicator, it also makes sense to me to wait until momentum is below the zero line and looking like turning back up.
What has surprised me is that the weekly volume traded on the Megabit announcement is less than half of the volume traded back in February when the successful Wafer announcement was released. Combined with this, the closing price on both announcement weeks is identical at 7.2c.It may be that the SP is held down around this price level until the commercial viability of the technology is accepted by the market.
So it would appear that the price level and timing of 4DS stock purchases is pretty straightforward and simple.But this is just this very first component of an Investment Strategy.The other questions that have to be answered are:
·How do I protect my Capital? I have assumed that the green uptrend line will stop any future retrace.Do I sell if the SP closes below this line on a weekly basis? Or do I wait for the SP to fall below say the level of the prior SP hit on this line.Or do I just hold forever and if the SP goes down to zero then that’s just bad luck.
·How much of my Capital do I want to risk on this one Investment?Your planned protective exit level and your personal acceptable level of loss will answer this question.
·When will I exit and take Profits.For me and most LTHers I think the answer to this question is when a TO offer is made, and of course I’ll be waiting for advice from the BOD.
·Should I wait for a new re-trace back to the green up-trend line before purchasing more stock?Given that we have another three months to wait for a new QR and announcement I tend to think that the probability of the SP re-rate that we are all hoping for occurring prior to this is lower than the probability of an SP retrace.Each Investor on their own must make an assessment of these probabilities and manage this risk.
This is all pretty simple TA applied to the longer term or Investor timeframe.This chart can be quite easily recreated in the free ProRealTime on-line charting package for those who would like to apply this sort of very simple TA to other stocks. I’ll follow up this analysis with an updated chart on this thread every week or so.I’ve got a pretty good idea of when I should move to increase my holdings now, and when and if I should liquidate my Investment as well.
All IMO – I hope this has helped those LTHers who may have been struggling with some of the more non-intuitive TA and Chart analysis that appears on the other threads and that we “Charties” like so much.
Long Term Sentiment: BUY; Timing Sentiment: WAIT
(20min delay)