Hi shaky. Thanks for contributing.
I actually prefer to see your trend line as just that and not a descending triangle. That line crudly captures some price extreme away from what the market must see as a mean (or fair value) but the price swings don't reflect an exhaustion of buyers and sellers that you might expect in a consolidating pattern such as a triangle pattern. There's just too much sideways action with a lack of commitment from buyers and sellers. I like triangles from a few days out to a few weeks. After that they become notoriously unreliable.
Even then, Bulkowski has the pattern at chance or less than chance which is basically unreliable.
But it has been an interesting couple of weeks. I was quick to dismiss my timing signal. I warned of an underthrow followed by an upward breakout and a growing trend into 2018. We can say that so far, theres a short term upward bias to price. It's only a seedling but it's unmistakable. Perhaps it needs a week or two to really show some pop.
In fact you could argue that we had a false break out of a little ascending triangle.
We can see on the daily above that there's a broad upward movement in the Stochastics with the shorter term one (in grey) threatening to bust out of its consolidation.
IT may be that our newly arrived fund hasnt finished accumulating. But he's obviously had to push upward to find sellers. This is frustrating for us in the short term, but there's some positives to this as well:
1. Suddenly the market perceives AEE as having something interesting because of ASEAN Deep Value's position. What do they know that we dont? Whay aren't we doing what they're doing? Social herding is the most powerful explanation for share price moves and it will create interest.
2. The huge volume a few weeks back was obviously their doing - they dont wan to see the share price languish any more than we do, so they'll support a rally when they need to - trust me. They may do this directly or have knowledge of market makers capabilities or use some hybrid to ensure when it's on, its on.
Thats not to say they control the market - they just wont move against the market. When its efficient to let the price run, theyll do so happily.
3. All of that churn falling into a funds hands is good for a breakout.
4.theres huge chunks of AEE's capital sitting with some very loyal holders.
On the weekly, what im really looking for now is a risiing OBV and some returning strength to my longer term Stochastics.
On the Stochastics we have some crude trend lines and it feels like we are normalising out of a deep bottom. Whether this carries through to longer term momentum is hard to say but we can see the smallest of upward trends developing. A run inot the high 3s is almost a certainty in short order.
The OnBalance Volume is very interesting.
It's hard to hide accumulation on the OBV indicator, and there's significant strength (As well as bullish divergence) that has me very excited.
For the most part we can say that where OBV leads, price will follow.
(20min delay)