I posted a chart showing a bullish flag/very bullish declining wedge. For those who are not familiar with these chart formations, I wanted to offer what is happening with the stock:
We had a major run up in June. The price went from .002 to .0176. That is an increase of almost 9000%. From that time to now, there has been consolidation. Consolidation is when someone makes a profit and wants to cash out or at least take some cash off the table. When you have a 9000% increase, and you see the price start to dip, you cash in.
Knowing that the price hit it's high in mid July (a 9000% increase mind you), smart investors know that there must be a pretty large consolidation that could take literally months.
When you get near the bottom of consolidation, you typically notice a wedge pattern - it could be rising, but often with such a large initial increase, you see a falling wedge attached to a telescoping flagpole. As the falling wedge comes to a point, there is pressure to break out (either positive or negative).
How do I feel confident in a positive breakout? Most importantly, the 200day MA is sloping upward - that means it should be a positive breakout. Also, because the falling wedge is part of a bullish flag or penant, this indicates that is is extremely likely that it will breakout up. Even more good news? The rise should break well above the flag (.017's).
Now if you only look at level 2, you may have noticed that the stock price just felt like it was going down between July and the beginning of Sept. But then something happened... the price started moving up, only to get stopped out (resistance at certain points). We saw them with someone trying to bring the price down by putting up a 9mil share sell. Normally that would cause the price to plunge, but a few of those actually got taken out. They still tried to push the price down, but it has been getting harder and harder. Now the volume is starting to dry up. That is because buyers and sellers are matching each other.
The next step is a small spike in volume that fuels a price increase. It will bump past the first 2 resistance levels. When that happens, new investors will step in and we should see a huge rise with volume attached.
When will this happen? There are candlestick signals for this too. I will not mention what they are so we don't have manipulation try to delay the inevitable for a day or two, but the formation is already being created. If you own shares, get excited. If you are shorting... it may just be a good time to reverse course.
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