Accumulation- Phase E
The past few days of trading action has been very volatile, and we can see that with consistent big volume days with massive price spreads and then subsequent pullbacks with low volume and smaller price spreads. From my analysis, we can see that Phase E has already commenced, but what has struck out the most is that we have had a very quick pullback to the last point of support at .265c as that was the previous resistance from our previous trading range. We saw that the larger operators are willing to push the price down, making it look like a mini-shakeout to the previous resistance point of .265c and then demand had stepped in straight away. (Again, not sure if many got their fills at .265c, unless you had your orders in previously). From this, we can gauge that, this may have been the actual real 2nd SOS (Sign of Strength), as it rallied very strongly and then was pushed back down by the larger operators , to take out any weak hands, both retail and smaller institutions.
From the graph below, we can see that there is an accumulation process going on with Polaris (NYSE), we can clearly see that it has a series of SOS, and pullbacks, similar to IOU. And then once it has left the trading range, it rallies strongly and then has a very fast pullback, down to the previous resistance line at $100, which is the AR (Automatic Rally). We can see that demand has come in strongly just above the previous resistance line at 100, and then rallied above with ease. The LT trajectory after that final pullback, shows that PII rallied to $147 from a low of $70. That would be a great LT trade.
If we do the similar comparison to the IOU's SP trajectory, we can also see that yesterday, we had similar action where the larger operators had tested for final support, to see if there were any weak hands/retail to take their shares from. We saw the depth change drastically from Sellers > Buyers, which shows the true intentions of the institutions and then it reversed instantly back into the previous trading range of 29c- 31c. These are all tests from the larger operators to see if there is any weak hands on the general trend up, if so, its best that they deal with them currently, rather than later on, as they would need to buy back their shares at a premium.
Also with the overall markets taking a nice healthy correction from their previous highs, shows that this was the perfect time to have those subsequent pullbacks, before we start our new uptrend. I can be certain that the action yesterday was a strategic tactic to weed out weak retail hands, as we saw lots of DT's on IOU recently with the acquisition announcement. The buying indicators would be taking a break now, which would cool off the excitement from lots of DT's, and then the slow uptrend begins again.
I, as an investor, am very happy and pleased with the trading action over the past few weeks, as it allows profit takers, DT's and weak hands to leave the stock. Which then only, strengthens the stock going forward, and we can clearly see that, as supply dries out, the stock moves upward with ease and minimal pullbacks.
. During the past few weeks I've even looked under the couch for spare change to buy more!
