year of the worlds smallest violin., page-37

Hey Scammer, I might be right, I might be wrong....

Here is a simple chart that uses only Gann angles. I’m not one for using TA on small caps; however I’ve been looking at this particular chart for awhile, and feel it’s certainly something worth posting.....

Below I've charted ACL from around (20/08/07) up until yesterday (13/12/2011). The reason I’ve gone so far back is because it’s important to establish when the last big moves up/down were. The Gann angles drawn on the chart are said to be far more accurate when you’re basing them of long term price movements and trend reversals. The Gann fan tool which I've used to construct these angles, should be placed on the first green candle of an uptrend,( refer to the chart below).

Now It’s hard to establish when an uptrend has started, however when you’re basing it over longer periods of time(like I have done), then the start becomes quite clear. (In the case of ACL, based on the weekly chart, the long term uptrend actually started in December 08- although it did pull back in Feb 09, a higher low was still made)....

If you aren’t familiar with Gann angles- the best thing to do is look at the chart right now, before you go reading anymore……

Gann angles are based around units of time, to units of price. Therefore the angle representing price and time balance is 1x1( 45 degrees). According to Gann the (1x1) is the most important angle, and once this angle is broken then it should signal the end of an up-trend.

When any of the angles are broken it means the stock is most likely to move down to the next angle before we see any further upward movement. So for example after breaking the (1x1), we will likely find support around the(2x1), if we were going to see anymore upward movement. ( This is exactly what happen with ACL(textbook stuff)- refer to the chart below).

Relevant points to note:

-Angles drawn in “RED” are most relevant.

-The last angle on the chart (8x1) Was considered a VERY strong support angle by Gann, particularly after the stock had been in a big decline( the longer the decline the more significance it holds)……Price will often rest on this angle several times or make a FINAL BOTTOM and start up from this angle*

-If Price has moved through the 1x1, 2x1, 3x1, 4x1- then it’s even more likely to hit the 8x1 before it goes up. Hitting the 8x1 shortly would also be perfect timing in terms of a fundamental reasons why this stock should move into a uptrend. (Funding sorted,dilution complete, Fonda revenues, news on Ph3’s commencing etc)

- If we were to hit this (8x1) angle in the next couple of days/weeks, then support would be found around 23-24c, around the same price of the SPP/ Placement…

-Ironically enough, one could have draw this chart using Gann’s angles at any point in the last couple of years, and still had major support( 8x1) in December 2011 at around 23-24c...

-The yellow circle with the horizontal line is simply to ESTIMATE where I’m expecting the SP to hit. Nothing more.

I’m of course biased to the sentiment that price is going to fall back before it moves forward- for more obvious(logical) reasons already noted in other posts. However my TA has helped act as a conformation towards my sentiment....

GL


:)