Diversified Oil and Gas Holdings (DVFI)

[Imperial Whazoo]

fratboy -

I posted yesterday about the chart showing support here. Yesterday, I posted that the piercing line signaled the end of the former trend. Did we get confirmation of the indicator pattern or not today?

Today, the stock sufferd a seller or two but ask yourself this question: did the seller succeed in making the stock price stay down or was it ultimately unfazed by the attempt to drive it down? To be exact, 1.19 million shares were dumped suddenly at 1:25 PM. As of this moment, that single transaction accounted for 63% of today's volume. On the face of it, it sounds bad. But was it? What actual price action was there? The seller was willing to sell from .0135 all the way down to .012. Assuming .0135 as your denominator, then the seller was willing to sell, even though his ending price was 11% below the start price of his selling. Thats a pretty msjor event... 63% of the volume for the day and a seller so determined to sell that he took a progressively higher loss even as he sold. But, did buyers immediately drive it back up? The answer is a resounding Yes. It emerged from the swoon unfazed. And it did so almost immediately, too. It was back up at its former level in 25 minutes. Conclusion? BIGN had the strength to resist a good sized seller and to recover almost immediately.

Thats the point: there was a seller (or maybe two) who decided to bail but were there immediately buyers... buyers, by the way, who not only were willing to buy it at the lower levels, but who demonstrated a willingness to buy it even though, to do so, they had to pay a higher price as the minutes ticked by. So, was this or was it not further evidence that accumulation is going on? If the seller was willing to take .012 but it immediately snapped back to its previous level, did the sellers win the day or did sellers fail to prevail in pushing it down? Where was support?.012? .0125? .013? .0135?

If the price had fallen with this trade and stayed below the open, wouldn't it have been fair to say that the price went down on volume? After all, upon completion of the 1.19 million share sale, 63% of the volume up to that point in the day was down volume, wasn't it? The headline would have justifiably read "Sellers push down BIGN on high selling volume". Instead, the headline reads "Sellers fail to push down BIGN".

Yesterday, I mentioned the formation was a piercing line. A piercing line is a sign of strength. Not strength that will manifest itself in a muscular move up necessarily. It is a reversal formation. It also does not stand alone. It requires confirmation. Ask yourself this question: If the piercing line was a sign of enough strength for the prior trend to be retarded (if not halted), were todays sellers able to demonstrate the opposite by both forcing the price down and holding it down? The answer is, of course, no. The piercing line was a sign of strength that was tested by a pretty muscular attempt to overcome it, and it held. BIGN held support and closed at .0135, up 11% from the low of the day where it also experienced the most volume. It held. Strength.

We are not out of the woods, but the price action today confirms the prior day's piercing line. We have not received the signal that is evidence of a new uptrend. We've seen evidence of the end of the prior trend, and evidence of support, even strength, at these levels. Every day is a new day in pinkyland, but today was good if you are a long. Tomorrow is another day, and we'll watch it and see what the price/volume action tells us. If something happens tomorrow and it breaks support, then so be it. Today, something happened and it held support. Tomorrow... who knows. After all, its pinkieland.

Regards etcetera...

Imperial Whazoo