Each day the coil tightens, waiting for the volume to arrive. 15.5 is the break, yet look out below if 13.5 goes on volume.
The flag has stretched to around a 28 day trading range, yet the dynamics are still very similar to last chart. Call it a flag, call it a range…
Bottom indicators: momentum is down (blue line) yet accumulation is slightly positive (green line) MACD is flat. This gives little direction and fits well with the up down up down of the recent trading range. One would be tempted to trade within this range at the risk of missing the break.
How long this range will last is anyone’s guess (hello FDA???) It is difficult to be convinced of anything with such flaccid indicators and volume, yet something we can see on a small scale is the higher lows that the Stochastic RSI indicator is showing (pink trend line) I was thinking this is bullishly divergent to the flat trading range we are in, yet on closer inspection the SP is also putting in higher lows, forming a bullish wedge against 15.5 resistance. Needs more time…
The same pattern happened in first half of May, which then got squashed with a sell-down on low volume. So, even with momentum down, it looks like pressure is rising again and something might give soon. I dread the thought of another low-volume sell-down for the simple fact that it will give oxygen to the unwashed conspiracy theorists on the other thread, yet it remains a distinct possibility and could offer an entry to a small trade or a lower-risk entry to anyone attempting to pre-empt the break.
Going back up to the Bollinger Bands – they are tighter than the old pair of jeans I tried to fit into yesterday, nearly putting my head through a wall in the process.
Not only does this give further explanation as to why we should expect a decent move when the volume finally comes through, it also explains why my wife has just started calling me dumpling.
Still looking for a break of 15.5 with target of around 19.5 to 21
Plenty of buyers trapped around 18 and 20c – whether these are our rusted-on holders or fickle punters wanting out at their buy price will determine how easily the SP can get through here.
Recent high of 24.5 could be the next barrier beyond.
Support remains at 13.5 – if this goes on volume then I would get worried.
The chart has relevance to the main near-term catalyst we are holding out for: The FDA’s ann regarding the IND.
On Jan 17th we were shocked with the ann, with nearly 5mil shares traded (highest volume of last 12 months) Since then, we have been groomed into expecting an orderly resumption of the trials when FDA is good and ready. Ie. The market is expecting this to occur as a matter of “when” not “if” and it is likely that the SP will be mostly baked in prior to the ann, with timing being the main variable. Conventional wisdom suggests that we will not have the same upthrust because the “shock” factor will not be there, and punters may be disappointed on the day (possibly even some "sell the news") However, the chart is telling us that a large, sustained move is still possible.
In addition to any positive ann giving fuel to help SP break out of the current flag/trading band, we are in a trend reversal stage, so any FA influence should cause a more pronounced SP movement than usual– so long as the volume arrives.
Per above, NUZ chart is typically difficult/messy to plot, yet I have managed to paint it as an inverted Head & Shoulders pattern. It’s a bit wonky, but it does fit into the current theory that we are seeing a compelling reversal of trend, and the long trade should overwhelm the short trade when the time comes.
On the whole, I remain optimistic, yet there is a lot going on in the word, including tax loss selling and possible CR, so now is as good a time as any to be prudent.
(20min delay)