The last week’s price action has witnessed a break below the...

The last week’s price action has witnessed a break below the support level of 2.8 cents. When considered over the last two months, it emerges that higher support levels are showing shorter periods of sustainability. To put it numerically:

	Period	Support price (compared to previous)	Sustained for (compared to previous)
1	Late July	1.8 cents	12 trading days
2	Late August	2.2 cents (22 per cent higher)	8 trading days (33 per cent shorter)
3	Mid September	2.8 cents (27 per cent higher)	6 trading days (25 per cent shorter)

To put the same data graphically:



Notice how the 20-day moving average is approaching 2.7 cents again. This last happened in June, when the price was partway through a 60% correction (from 4.1 cents to 1.7 cents):



The next chart looks at weekly trading volumes. About 9 weeks ago, the daily price hit its low of 1.7 cents. Since then, weekly volumes have always been at least 25 million, and 4 of those weeks exceeded 100 million. Volumes have been falling during September, but this hasn't been a great predictor of price action:

• Back in July, a 6-week trend of falling volumes was accompanied with FALLING prices
• In August, a 3-week trend of falling volumes was accompanied with CONSOLIDATING prices
• In September, a 3-week trend of falling volumes was accompanied with RISING prices.

In recent months, prices have shown no consistent pattern with respect to (falling) weekly trading volumes:



In some ways, technical analysis will take a backseat this week, in the lead-up to the September 30th target date. The driving factor is more likely to be sentiment - the bulls will buy more, and the bears will decide what day (or price) they'll sell at during the week (before any sudden trading halt that might emerge). That's assuming they haven't sold out already (and aren't shorting the stock).

While technical analysis has its place, a good trader knows there are times when it should take a backseat - especially for a speculative stock in the week before a much-anticipated deadline.