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Friday, February 22, 2008 6:42:28 PM
Candlestick (ONLY) Comments
(_bbb_ requested it, so yell at him)
Reference Chart
Candle Today: Nearly spinning top since it didn't close at HOD. (Close though, so technically not a hammer.)
Comments
Above is a three month chart of ONLY the candles for GTEC. What follows is strictly a commentary on some psychology involved in the stock.
The last three months of the stock has been quite a psychological ride for longs since the stock has swung from 16.5c to 34c due to the latest panic on Wall Street. Nonetheless, 16.5 provided to be a solid support from which the stock has made a series of higher lows -- reflecting people are upbeat about the stock as a whole despite the intermediate retraces after occuring on an average of 5-7 day cycle uptrends. The long psychology is essentially bullish despite the overall market and the ability for the candles to trace out higher lows show that.
The short term psychology seem to be indifferent since the chart is showing evidence of swing trading after 22 Jan 08. It seems like the short term players expect a nice trading range to develop while the longs believe their stock will rise. The result is a chart with healthy trading with an established uptrend incorporating both sides of the coin -- healthy swingers and longs. At least both the short and long term interests agree the range should be climbing upwards. Technically no one really comments about it, but I see it as bullish by both swings and longs. The swings don't want to take down the stock, nor do the longs. So, you get a nice slow climb with lots of wiggle room in the chart. (If you want to see a chart where swinger expectations/psychology signal a downtrend, check the RHT chart.)
Despite the higher lows forming, there is a hard resist at about 33c-34c. Although this could be attributed to volume effects, the volume chart under the candlesticks show this is not the case. No matter the volume, that's a solid resistance. Thus people at this point are bullish about the stock, but don't want to pay 34c for it. This doesn't run counter to the bullish psychology mentioned earlier, but indicates a line on the chart that could be turned into a support if good volume and news were able to break it and allow people to feel comfortable (justify to themselves) with the 34c PPS. Thus, look for a moment where people are OK with such a valuation and support the breakout. If the breakout is solid, psychology will accept the 34c+ PPS and you can hammer out a nice psychological support.
The latter half of the chart seems to have a really ugly cup and handle if you stretch your imagination. If enough people BELIEVE this to be the case, you can expect a 7c rally after the formation of the handle -- potentially getting you over that damned 34c resistance. In fact, I expect this to happen as long as market psychology doesn't go nutty like we saw in Jan.
Also, many crude investors may see today's candle as a hammer and be extra-bullish. If so, keep this in mind and remain aware that this last candle is a spinning top -- a signal of indecision by the market. Although it looks like people WANT the PPS to climb, not holding the HOD at EOD seems to run counter to that desire. (My guess is a flipper killed the HOD at the EOD.) If you can form a hammer after this, this will signal a confirmed bullish psychology and the next week or two should be fun.
(_bbb_ requested it, so yell at him)
Reference Chart
Candle Today: Nearly spinning top since it didn't close at HOD. (Close though, so technically not a hammer.)
Comments
Above is a three month chart of ONLY the candles for GTEC. What follows is strictly a commentary on some psychology involved in the stock.
The last three months of the stock has been quite a psychological ride for longs since the stock has swung from 16.5c to 34c due to the latest panic on Wall Street. Nonetheless, 16.5 provided to be a solid support from which the stock has made a series of higher lows -- reflecting people are upbeat about the stock as a whole despite the intermediate retraces after occuring on an average of 5-7 day cycle uptrends. The long psychology is essentially bullish despite the overall market and the ability for the candles to trace out higher lows show that.
The short term psychology seem to be indifferent since the chart is showing evidence of swing trading after 22 Jan 08. It seems like the short term players expect a nice trading range to develop while the longs believe their stock will rise. The result is a chart with healthy trading with an established uptrend incorporating both sides of the coin -- healthy swingers and longs. At least both the short and long term interests agree the range should be climbing upwards. Technically no one really comments about it, but I see it as bullish by both swings and longs. The swings don't want to take down the stock, nor do the longs. So, you get a nice slow climb with lots of wiggle room in the chart. (If you want to see a chart where swinger expectations/psychology signal a downtrend, check the RHT chart.)
Despite the higher lows forming, there is a hard resist at about 33c-34c. Although this could be attributed to volume effects, the volume chart under the candlesticks show this is not the case. No matter the volume, that's a solid resistance. Thus people at this point are bullish about the stock, but don't want to pay 34c for it. This doesn't run counter to the bullish psychology mentioned earlier, but indicates a line on the chart that could be turned into a support if good volume and news were able to break it and allow people to feel comfortable (justify to themselves) with the 34c PPS. Thus, look for a moment where people are OK with such a valuation and support the breakout. If the breakout is solid, psychology will accept the 34c+ PPS and you can hammer out a nice psychological support.
The latter half of the chart seems to have a really ugly cup and handle if you stretch your imagination. If enough people BELIEVE this to be the case, you can expect a 7c rally after the formation of the handle -- potentially getting you over that damned 34c resistance. In fact, I expect this to happen as long as market psychology doesn't go nutty like we saw in Jan.
Also, many crude investors may see today's candle as a hammer and be extra-bullish. If so, keep this in mind and remain aware that this last candle is a spinning top -- a signal of indecision by the market. Although it looks like people WANT the PPS to climb, not holding the HOD at EOD seems to run counter to that desire. (My guess is a flipper killed the HOD at the EOD.) If you can form a hammer after this, this will signal a confirmed bullish psychology and the next week or two should be fun.
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