Short Term Trading Week Starting: 5th Sept, page-498

Hey @Waiting4Godot

I snuck by and wanted to reply. My chart is below and under that, my comments. Cheers GF



No FA has been factored in here, it is pure FA

EDE – WFG that is a great question. EDE was a major breaker late March/early April this year. So looking back at the chart this is what I see and think
Around early mid May, EDE had really tried hard to move higher after some serious attempts, however the sellers had the upper hand. This was the start of the decline.
Around 27^th June EDE was oversold and buyers stepped in to mop up
EDE made a number of attempts to break through the overhead resistance, (or the downward trend line) July 18^th (see blue arrow) again 29^th August (see blue arrow) however this time, that volume of buyers was enough to gap the share price up 22%. There was another failed attempt to breakthrough on Sept 1^st.
Sep 6^th Finally buyers were strong enough to step up and force the share price up, and close up another 16%.
The area delineated by the horizontal yellow lines was a period of relative low volatility.
It was interesting that post gap up on August 29^th another five trading sessions were needed before the share price had enough momentum to close above the second top line of resistance (seen as the second top horizontal orange line). Interestingly the closing price was bang on the resistance line that was previously support back in April 18^th and 19^th (see pink down arrow)
The next two trading sessions, and price has failed to follow through and confirm the breakout.
So the question now that you have asked is “Would EDE be classified a breaking of downtrend on a large positive volume?”
What we now know – the short term current support zone is now around the 23-24.5cents area. Given the volumes traded it is not retailers who are the main players. This means, expect decent fluctuations in the price traded, which has already been shown to occur. That is just how they work with the vast amount of money to throw at whatever they wish to.
Technically EDE has finally broken through that downward trend line. That high volume day 6^th September was confirmation. However, this is where it now gets tricky.
More often than not, once upward momentum gets going (and it is much harder to move up, than it is to roll down) there tends to be follow through buying that confirms the breakout. This has not happened so far, post 2 trading days. Does this then mean it was a false breakout?
Smart Money (SM) deploys every and each trick/manoeuvre at their disposal to make the retailer into the loser. This is just how the market works. It is them v us. Is there a possibility that SM has been and gone? Maybe, or is there also a chance that the SM is deliberately trying to trick the retailer into thinking they are still in the game. Either outcome is still in play.
If I was thinking of trading this stock, I would be placing a stop at either the low of that breakout candle or just under it. That way if there was a back test to check for remaining supply I would hopefully still be in the game. If it was however a continuation of the selling then I would be triggered out.
In the end however, for me it is a pass at this point. I would have been buying in that low volatility area during the early to mid part of August and selling into that last highest volume day candle, or at worst, the next day. The reason I say the next day, is that often I would take a punt if it was looking likely that it was going to close on the high, then if I was holding overnight, I would then be able to either sell into the open, or if it was super strong in the first 30mins, hold and tighten my trialling stop.

Cheers
GF