attn dascore, page-7

Hi Hatchworks,

Thanks for clarifying some issues raised.

Although I have said my previous post (which was on the short term prospects of HDF ) was the last in this HDF ASX Stock sub forum for reasons which you well know by now, I felt I should make also make a more detailed post to cover the long term cycle projections if I had the welfare of traders who are not familar with cyclic analysis and would like to have the benefit of such an analysis to help them in their trading.

So this is going to be a long post. If you are reading this post and are in a hurry, please do skip this post. Thank you.

A REVIEW
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In my first and last post to Hatchworks, I posted a short term chart of HDF using the J M Hurst Technique which showed HDF to have a breakout from the 7th Aug through a VTL ( valid trendline) before finally making a good spurt Friday to close at 0.95 cents. I have also shown a projection called a FLD projection from 7th Aug that projected a target of up to 0.97 cents as well with a time window as stated. I have mentioned that this is the short term projection, and to know whether prices will continue further up after reaching the target of 0.97 cents we would need to do a long term cycle analysis. In this post, I'm going to do just that.

The Technique
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The price of a stock comprises the sum of several price cycles. These cycles can broadly be categorised into short term cycles, medium term cycles and long term cycles. Each of these individual cycles act together to cause prices to fluctuate and interact with each other to form a combined cycle chart called the cycle sum chart.

By decomposing the cycle sum into the individual cycles, it is possible to get the cycle chart of cycles that belong to the category of short term cycles, medium term cycles and long term cycles. We would then be able to study these individual cycles to understand in detail how they affect the stock price of HDF and also track their peaks and troughs. We can also throw away the noise from these cycles, and recombine the individual cycles into a complete cycle sum chart so that we can project the future movement of the cycle with more accuracy.

Generally, I would have posted the decomposed cycle charts along the way when I post on HDF in this forum, but since this is not going to be the case for reasons that you well understand arising from the post by "fastenyourseatbelt", I will just post the original cycle sum chart that is the sum of all the original cycles acting together with the inherent noise, but it should be accurate enough for indicative projections for trading purposes.

The Charts
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SHORT TERM
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As already explained, the target of 0.97 cents was a result of the price projection on 7th August using the Hurst technique.

The short term chart also shows an inverted head and shoulder pattern that has a target objective of around 1.07 cents. It also covers an overhead gap in the price chart that needs to be filled as well.

So profit taking is expected to occur around these levels, and if all the profit taking is absorbed, prices will continue upwards. ( To "fastenyourseatbelts"- I'm not downramping here. I'm just stating what the technicals suggest. Just stating what is plain)

THE CYCLE SUM AND LONG TERM
===========================

Here is the cycle sum chart to show the long term trend that we talked about above. The cycle sum chart shows the past cycle projections and the future cycle projections and a price bar chart with Hurst curvilinear envelopes.



From this cycle sum chart, we can make the following observations:

1. The cycle sum chart shows we are in a short term uptrend, to be followed by a short period of minor fluctuations to sideway movements before continuing in its uptrend. The short term trend is thus seen to be a component of the longer term trend which has in fact begun.

2.The Hurst band envelope show prices are contained within a curvilinear channel that is bending upwards and indicating a general uptrend.

3. The price target of the current longer term swing would be the upper bound of the curvilinear envelope where price would touch the edge band. I have shown two past occurrences as examples.

4. Is this cycle projection accurate? Nothing is better than to check the correlation between the peaks and troughs personally. To do this please draw vertical lines from the peaks and troughs of the cycles to check the correlation between them and the price bars of HDF.If the cycle peaks and bottoms correlate to the peaks and bottoms of the price, then we know that the cycle projections are accurate.If they do not correlate, the cycle projections are not accurate. Please check them yourself.

The cycle chart also only indicates the direction and timing of the peaks and troughs and NOT the size of the price movement.Price targets are read from the Hurst band envelopes in the price chart. Also please know that this is the cycle sum chart formed by the original cycles together with the noise ie. this is not the recombined cycle sum chart from decomposed isolated cycles without the noise which would provide for a more accurate reading.

CONCLUSION
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Imho, short term we are in an uptrend with a possible projected target between 0.097 (Hurst projection) to 1.07 ( inverted head and shoulder pattern and filling an overhead gap ). This short term cycle forms part of the long term cycle which is projected to continue till the last week of October 2009 as can be seen from the projected cycle sum chart.


In closing, I hope I have managed to provide both a short term and long term cycle analysis that is useful to Hatchworks and those interested in Hurst cylic analysis. I hope you have not considered this long post to be an unwanted intrusion on your comfort zone. I consider it a wonderful opportunity to be able to share with you some of my thoughts and I'm happy to make this a last and final post on HDF under the circumstances that you well know, and leave the task of sharing updates and analysis to others such as "fastenyourseatbelt" who are more knowledegeable and well versed than I am, and thus keep the peace and equilibrium in this HDF sub forum.

Please read the disclaimer below my signature line, and may the best prices be yours,

dascore