The Moon Phase

[TOB]

HDY

An interesting channel has formed favouring the round numbers, 80 cents at resistance and now pounding at the 70 cent support. With all 8 of the prior trading days either closing exactly at 70 cent support or touching it as a low. (Note 70 cents is the first target I called on 6/18/12 when HDY was in a rally attempt)

Even the highs of the last 5 of the last days are exactly 73 cents, and the 4 wicks which penetrated support during this 26 day channel are a low of exactly 69 cents.

Pretty chart.

So far holding support at 0.70 has been a good sign for HDY. Every day that trades above key support at 56 cents adds to the strength of that support and the multi-month basing pattern on the Daily Chart.

Alternatively, the overall chart of this pattern has been one of a rounded multi-top distribution. The peak top was $1.10 and since then we have seen lower highs, lower lows and no breakouts above resistance, just breakouts below support.

This sort of rounded top pattern tends to resolve in a sharp move to the downside. (Scroll down for the second chart for a rough outline of the rounded multi-top distribution pattern)

For this reason I still favour a re-test of the low at 0.62 and 0.56

Alternatively, HDY needs to rally and hold above 0.80 for the daily chart to change from bearish and indicate a possible market bottom.

I don't see that yet.