TA discussion, page-4449

Much has happened over the past three years plus since Alexium first broke out in August 2014. First the big bullish but unsustainable move topping out in the August/October 2016 period. Then the big reality check pullback ending with the significant 46.5 cent swing low in August 2016. This has been followed by a period of consolidation as a channel formed  and is where we are at today.

For those who mght not be familiar with Stan Weinstein's book 'Profiting in Bull and Bear Markets', he defined the typical stock market cycle as a four stage process using weekly charts which help to filter out a lot of the noise....

Stage 1 -  Consolidation period
Stage 2 - Rising period
Stage 3 - Topping period
Stage 4 - Pullback period
Stage 1 - Repeat etc

It is a good way of  getting the big picture understanding of what is really going on. Of course it is subjective and doesn't necessarily fit in every case but I find it useful in getting a better feel for what might be going on and identifying major turning points. I did do this exercise some time back but things have moved on quite a bit since then.

I have included two charts, a three year and ond one year view and the the stages are  defined on the charts. In the shorter term chart the trend although slightly up is really about consolidation or a stage 1 period. In particular note the lower trend line where the SP has breached the trend line over the past 3 weeks but  in each case it has recovered to close above.

The period since late January has been tough starting with the SP hitting the upper channnel trend line which is effectively an area of strong resistance then reversing with added pressure from a series of announcements and the uncertainty generated by the approaching deletion from the ASX300.

No one can predict the outcome but my best guess from a combination of better news and prospects emerging in the last couple of weeks, signs of buying support around the lower trend line and ASX300 move out of the way, is that a move back toward the top of the channel is not out of the question. If the move eventuates soon the next challenge will be the 75-80 cent zone. The next attempt will mark the third try to break through this zone since January.

A good announcement or two would help.

Weekly Long Term  Three Years



Weekly Medium Term  one Year