Hi all,
I've been sitting on the sidelines patiently waiting for MYX to invite me back in, but a couple of the comments and the conversation between @krugerrands and @andrew9484 prompted me to mark up a chart and some comments. There hasn't been a chart around these parts for some time so hope some are interested. You don't have to be a chart whisperer to guess that the story this chart tells is not all sunshine and butterflies- but there are some potential positives. This is a daily looking at mid December onwards because of some of the changes in the nature of the trading it reveals...(from a TA point of view- no FA here!). I've also included a weekly because some of the patterns etc are easier to see without the "noise" of the daily.
The gap down on the 22/2 is significant, but not unusual on an announcement day. What is more significant was the price and volume action a few days before the announcement and a few days after. Weakness appeared on the 14th and 15th when volume started to drop- the current price rise was no longer being supported- and then selling pressure increased with rising volume on the down bars which eventually pushed price below the lower support of the rising channel. Enough demand was present in the small resistance zone of 0.78 to 0.80 to push price back up to the edge of the channel, however the gap down and selling on the 22/2 broke down through that. It was the following day however that selling pressure really ramped up with an assault on the support level of 0.725, which was strongly defended to push price back to 0.73.
Since then price has ventured below 0.70 but we can see the area of 0.69 to 0.70 providing strong support against the continued selling pressure. However the highs during this period have been getting lower which suggests that demand has not been strong enough to force a sustained upwards movement. This demand vs supply dynamic is what has formed the descending triangle pattern. The reason volume has been decreasing is there is less distance between the support everyone can see and the gradually lower highs, so short term trading on the long side carries a higher risk at the moment and these guys have gradually stopped participating as heavily. Trading on the short side also carries higher risk because of this narrowing gap, but this type of pattern is seen as bearish with a higher potential for a down side break- which might explain why nett shorts have been creeping up again over this period.
Price at this point is at a vulnerable position, but what happens next is obviously not set in stone. It is possible that the buying support is maintained and price moves in to a sideways channel which eventually starts to see some signs of strength. We could potentially even be seeing the beginnings of an accumulation period where a base forms around this level. Or of course an announcement of some sort that jumps price up or down to a new trading zone. This really is wait and see I think...
Best of luck everyone- daily and weekly charts below- latest weekly bar obviously not complete yet 'till close today...
