Well, from a charting point of view, what it did was back and fill. If you know how to do it, you can draw what are called Fib lines. I use .382, .50, .618 & .784 as my primaries, although others add some other ones.
What I do is draw a base line from the start of an up move and then connect it to the top most point. The pullback lines are the 382, 50, 618, & 784.
There is a lot of theory to such things and not everyone looks at the lines the same way, but generally, each step back is going to either hold or capitulate. So, what this stock has done is basically, pull back thru the whole set of lines.
The good thing is its been on low volume, which means more people are holding that bailed. If you want a silver lining, that means that the long term view is proly that there is a good chance that this puppy will recover. The bad thing is the low volume means that people don't feel in much of a hurry to step into it with buys. So, with little interest in buying it, the price is getting lowered to try to find the point where there are buyers.
This stock needs to announce more news. Progress. Profits. That kind of thing.
They surprised me the other day with the third plant in a very short period of time, so obviously they are doing business at a nice clip, but the fact remains that they need to do that regulary or buyers will remain on the side lines and price will languish.
The effect of news will be to generate interest. If the news is good, it should be upwards. If bad.... well, I hate even thinking about that.
Another thing we faced was that there was a gap at the beginning of the up move. I kept hoping it would hold up at one of the Fib lines and not even come near the gap.
Well, the gap pulled it down like gravity. And it is now a fully filled gap. Thats generally good news. The gap loomed out there needing to get filled, and it now got filled, so, as one of my mentors says: it did the work it needed to do.
Now we need to see a bottom come in. News would be nice. And so forth.
The stock is a nice story stock. IMHO, we need more story..... thats all.
Just my read on it.
Imperial Whazoo
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