Asleep at the Wheel

[Todmohr]

Hey Rich..

Thanks so much for the chart on LWLG. I have owned this stock since roughly 2007, so you are correct in assuming that I am fairly familiar with the stock price pivot points - though having a more knowledgeable chartist's point of view is always beneficial. Charts - as you well know - can be great "guides" in determining near term direction for a stock. Unfortunately, fundamental issues can skew what the chart is telling you - and I believe that is the case here.

To my point: why, if what you said in your post caption below is true - which I believe it is - is the stock clearly moving lower. The explanation, imo, is fundamental in nature - not technical, which, as we know, is what a chart reveals. The company did a recent financing, with a strike price of $1.25. It is my belief that this pullback from the recent highs of $1.50-$1.80 down to this level, of roughly $1 as a low, is due to the company selling shares to the financing company - and thus a fundamental result. This would explain the somewhat confounding nature of the chart you referenced - that being the downward price pressure, in spite of the accumulation at the offering price. In a stock like this - with such a small share structure - it takes a very small imbalance of selling, or buying, to move its stock price in one direction or the other.

Based on what I just noted above, trying to calculate support price points in stocks like this is particularly challenging. Having said that, historically $1.00-$1.05 has been an area of support in this stock - most notably $1.05. Were it to break below that price - and, for the record, it bounced off this area just the other day - my guess is the .90 cent area would be "roughly" the next spot down and then .65-.75.

Thanks again for the chart.

Ian


"despite the cmf still showing positive pressure at the ask, and the chiosc and accum/dist showing the signs of accumulation, there's been a strong downward undercurrent ever since the 20ma crossed below the 50ma. the trend lines-- aroon, adx -- and momentum indicators -- ppo, macd -- are all going south. notwithstanding the buying, the fast sto, williams and rsi's are all heading to oversold."