Now for an opinion from a technical analyst.
Positives:
1. Break of downtrend line on high volume.
2. False break below previous swing point low of 0.27. False breaks often lead to fast moves in the other direction (due to exhaustion of sellers).
3. Strong move up (26%) on break.
4. Bullish divergence in both MACD & RSI.
5. Previous bullish divergence resulted in a move from low to high of 95%.
Negatives:
1. Stock is in a downtrend (you are swimming against the tide)
What am I doing?
I will be entering on Monday. The potential reward is worth the risk of going long in a downtrend. I will use a stop loss 1 tick below Friday's low. If the stock does go up strongly on Monday I will move the stop loss up to my entry point so I can break-even. I am expecting a strong move. If it does not eventuate I will get out.
Daily Bar Chart
Chart shows break of downtrend line. If it continues to rally expect initial resistance around previous swing point high of 0.375.
View attachment 593010
Daily MACD Chart showing bullish divergence
Bullish divergence is when price makes a new low but the indicator makes a higher low.
View attachment 593013
Daily RSI Chart showing bullish divergence
View attachment 593016
Daily Bar Chart of previous rally at beginning of 2017
Previous rally went up to 50% of range of prior downtrend and stopped at the top of a gap down in price.
View attachment 593019
Daily Bar Chart showing expected rally & likely profit target
If history repeats a rally from here should complete at 53 cents.
View attachment 593022
