I have a premium service with Stockcharts.com which allows me to annotate charts. One of the tools that they have is the ability to click on three points on a chart and it will draw a trend line. I did this (for ECCI) using the November, 2003 bottom, September 2004 bottom and May 2005 bottom. The result was a downtrend line that connected the bottoms. Ironically, yesterday's low touched that downtrend line. This is not to say we won't see it again or even lower, it's just another "indicator" to me that we are "in the neighborhood" of a significant bottom. Unfortunately stockcharts.com doesn't allow me to post the annotation here so perhaps you can try it with the chart service you use and see if you don't come up with the same results.
Also, if you do the same thing with the tops, connecting the January, 2004 top, the October 2004 top, the September 2005 top and the May 2007 tops you get a very defined channel of which the bottom of the channel is .005 and the top of the channel is .055.
You combine this with the extremely high negative sentiment on this stock resulting in a weekly (14) RSI of .29 and you have an oversold condition that is unprecedented for this high Beta stock.
I will be the first to admit that it is difficult to be optimistic on any stock in this group, but I like to use channels and oversold weekly RSI (.33, .34 area) and this stock has both. Only time will tell if I am right or not, but I think buying this stock down here will prove to be a winner over the next few months.
I will admit that I was early, buying this stock at .022 when the weekly (14) RSI hit .34 but if you look up the word capitulation in any technical analysis book you may very well see a picture that is very close to what the chart of ECCI looks like. EEGI looks similar except the weekly (14) RSI is not oversold enough.
IMHO ofcourse.
AI
