To JAMES 123,Hi. I don't think your question regarding support...

To JAMES 123,

Hi. I don't think your question regarding support was adequately addressed by anyone so i'll take a shot at it for you.

Despite what some people may think about dust settling on your charts and sitting back in your rocking chair waiting for the forces of luke sky walker to jump out of that chart sometime next week it isn't a bad idea to acquire some charting skills. As you've now probably guessed there are two schools thought regarding the purchase and sale stock be them technical and fundamental. Your question sits squarely in the technical corner and it would take a fundamentalist to tell you to forget the idea of support and watch luke skywalker get covered in dust.

I dabble in both the arts, you might consider me a day walker. The reason i do it is that they both have merit and if nothing else will give you the confidence you need to enter and exit a trade.

The reason stringtickler doesn't care either way is because he is fully invested and confident that over time the stock will head north. This is a reasnable assumption given that most stocks can't go much further south and given time they will go up. If that's your way of thinking James 123 purchase the stock at 12pm tomorrow turn HC off and check your investment every 12 months at tax time. There's no real reason for being on here otherwise. Go find another interest.

If your interested in trying to work out if the stock will rise, fall or do nothing then do take the time to read up on technical charting.

I don't have an open chart but i was looking at it earlier today. What you say sounds valid. In technical terms what you're describing is resistence becoming support. This happens alot. Don't ask me why it just does, and so does a lot of other technical stuff like cups and handles, triangles they just do.

So, you've found support at 10 or 11c that's good and so where to from here. The market is reasonably forward looking and also has a lot of expectations built into it. By ecpectation i mean the upcoming announcement may already be priced in. That is, when the anouncement comes out nothing will happen, priced in.

Support and resistence come into play when you want to buy or are thinking of selling. If you haven't bought into VPG yet you can play the trade like this.

Buy very close to the support line you've found 10-11c. Look for a target, in this case it could be 15-16c. Look to see where the stock will fall if its a bad announcement or if its factored in and the price losses momentum. In this case you've identifed 8-9c.

Do some math and make the trade. How much can you afford to lose if the trade goes against you. 11c to 8c (-3c) $300 per 10,0000 shares. If it goes with you 11c to 15c (+4c) $400 per 10,000 shares. That it in a nut shell. You have an entry price 11c, you have a stop 8c and you have a target of 15c.

In technical terms there's also saucer in the chart. Depending on where you put your lines its either played already or the stock could go to 27-30c within the next week.

With an announcement due out next week and the chart looking the way it does i wouldn't bet aginst it going to 30c.