SEBASS, IMO just needs to see where it shakes out to now. That was a neat, parallel channel, and it would have been seen as very bullish had it bounced off that lower line again, but it didn't. So I'm looking at the 15 min. intraday chart for clues on the reversal.
SEBASS and all, never really looked to closely at the channel .. I've stated before that it's just typical congestion and accumulation on every major dip we've had in the past 6 to 7 weeks while trading at this range with no real pattern. We've had a nice support roughly around the .27 mark throughout the whole time. On every dip, I've seen heavy accumulation of shares with larger block buys coming in .. roughly around 2:1 ratio of buys to sells maybe at times more or less.
To keep it simple (I’ve mentioned this before): I'll say it again .. watch MACD at this point. It's well over the centerline (still very bullish) and yet 12MDA line is under 26MDA poised and waiting for a breakout. This in combination with the Stochastic today reaching under the 20 mark indicates an oversold area. Typically after this point both MACD lines (12DMA and 26DMA) lines should start coming closer together and eventually leading to the 12DMA crossing up over the 26DMA indicating a major breakout (watch for this to happen).
One other thing to mention in the last month as the MACD lines crossed down (12DMA crossing under the 26DMA) we've had one other time when Stochastic hit under the 20 mark (3/4/2005) ... it was followed quickly by a move up in price within the next day or two. unfortunately it failed to break out completely. We are at the same point again now. This time it's a stronger indicator because it's been here before. Correct term for this is having a "double bottom" in stochastic. So the tendency to break out here is a lot stronger then before. I was lead to believe that the last time we were at this point we would have had a breakout (only lead to a nice jump though), now I’m twice as confident. All I can say is watch the MACD and the crossing up of stochastic. We are at the second bottom now. This next move should be stronger … the goal here is to break our resistance of roughly around .35
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