Sorry about taking so long to get back you Tomboy. I was partying hard on Friday celebrating the 12.9% gain we had.
In your post you questioned my belief that the downward trend had completed and we were due for a strong open on Friday. You wrote
You can read my prior posts over several days last week were I suggested that the downtrend momentum was weakening and there was a divergence between price and Chaikin Money Flow. Further the dumping by Pershings was absent on Thursday. Given the severity of the downtrend was magnified by Pershings' intra-day selling, their absence from the market would result in an explosive reversal. So yes. A hammer is and remains a bullish signal my friend
As for Barcharts not agreeing with me, well, who takes them seriously anyway?
Wow! What a great close on Friday! The "high and tight" pennant formation that formed over three weeks completed. For those that are interested, here is a great description of the
"high & tight" formation by Bulkowski. He writes that
"...High and tight flags are the best performing chart pattern in both bull and bear markets..." Assuming that we get confirmation and it is indeed a breakout, it's going to be sweet as the average rise post breakout of a "high and tight" is 69%.
The first chart below shows the breakout from the "High & Tight" Flag formation. Notice that both Williams and the Chande Momentum Oscillator have reversed. Chaikin Money Flow has crossed over 0.00 and confirms new money flowing into the stock.
The hourly chart also shows a similar tight flag and again, a breakout on Friday with massive volume. Interestingly enough, it was after 11AM when the downtrend was broken did we see continued accumulation on higher SP for the rest of the afternoon. It would be safe to assume that others with "deep pockets" saw a possible completion of the downtrend. This alone would be enough for me to assume that Monday could see a "gap up" as others who missed out on Friday take their positions. We could also see the shorters who got roasted (hahaha, poor fellows
) scramble to cover themselves.
As for where we may go from here, who knows. However, I was looking at the weekly chart and saw a few interesting things. Firstly, last weeks candlestick was another "hammer", a bullish candlestick pattern
. It was interesting to see that an Andrews Pitchfork nicely summarises the last several months of trading. I've never used it before, but the following site has a great summary
here. It contains this great extract.
"...Andrews’ Pitchfork is used in many of the same ways as traditional channels, including as support, resistance, and reversal trend lines. In addition to these standard methods, trigger lines can be used to identify additional areas of support and resistance based on a line connecting the first point (“handle”) to the peak at the third point. These are particularly useful when a breakout occurs from the Andrews’ Pitchfork later down the road..."
If we can break out from the Pitchfork, this is very bullish and we could very sell see a continuation of the trend. Should we eventually breakout and pass $0.87 then maybe a Fib Extension could provide some estimates.
I'm looking forward to tomorrow. I get the feeling that the shorters are going to be like
(20min delay)