MSB Charts, page-21

Hi all. Wow, those last couple of Ultra High Volume bars are interesting! I'm not one for predictions but that will show up on many traders volume scans and put MSB right at the front of attention- so should be some action this week!

I'm not speculating as to where that volume has appeared from, but regardless I'm very wary of wide spread bars on no news- particularly on high volume. Is it a trap? Is there an announcement coming? What does it mean? The background of the chart can tell a story about the balance of power between supply and demand and help put current price and volume action in to context. With that in mind, what does the chart say? So for some Sunday afternoon entertainment, I've marked up a blow by blow account of the significant turning points since the recent low just prior to Xmas.

Overall it appears to me there are more "signs of strength" appearing in the background, and demand has been gradually wearing down supply. Price has just broken up through a symmetrical triangle and the 50EMA, but stopped a hair short of recent UHV resistance of $1.275. It is not unusual for price to go back and test for supply back near the breakout level to clear remaining sellers before a strong move upwards. And obviously from the volume there was/is a lot of supply present, so it seems likely that even if it breaks above $1.275 that it would come back to test a bit. A Holy Grail announcement or news could obviously change all this!

So what are some of the things to look for and what would they mean?
- a test below. A low volume test with a close mid to high on the bar, even if it ends up as a red day, would indicate there is little further selling interest- a sign of strength. A high volume test below and red day will indicate there is still some work to do clearing out supply. Price should be defended heavily at $1.23 and ideally any time spent below this level is brief, and closing below would be a sign of weakness. $1.23 is the triangle break out level and the high of the previous bar.
- there is a a danger that the latest bar was engineered to attract new buyers, and a lot of the volume was in fact hidden selling, before another move down. This is like the opposite of a shakeout and the next bar or two will confirm whether it was or wasn't. A wide range bar closing low on the bar and even right down near 1.20 over the next one or two days would confirm it as a strong sign of weakness. It would look like a two/three bar top reversal.
- a break up on good volume. Not much to say here- happy days $1.40 here we come! (but could still re-test the breakout level somewhere in there!)
- an announcement or trading halt. Would confirm a leaky ship and confirm once more that the ASX is stacked in favour of insiders and against honest retail investors- and would be the second time within a week where this has happened to a stock I've been following! (MNS)

There's more of course and just my thoughts. Enjoy the week!