In Retrospect: Mining, WIN, SMPH, BSC

Mining

Mining was very bullish, so bullish that it has already formed a new high. Watch out for a possible side to downward movement soon as RSI is now overbought. It is also possible that the side to downward movement may form a falling wedge, a confirmation of the bullishness.

WIN

The bulls and the bears are in a constant battle for the past week as most of the trading days last week were marked by the same opening and closing price. There is a little bit of upward movement in the price, but it never was able to move above the 65 day MA. There is also another resistance coinciding with the 65 day MA, this was the gap down formed last August which might also be contributing to the slow upward movement of price. On the bright side MACD has now crossed above the center line which is a sign of bullishness. However RSI is now near overbought level. For the days to come, the MACD may retest the center line. To confirm its bullishness, the MACD needs to stay above the center line and volume should be light on down days. The big symmetrical triangle that I earlier pointed out is invalid because the volume on the breakout of the smaller symmetrical triangle has broken the diminishing volume characteristics of a symmetrical triangle.


SMPH

SMPH went as high as 12, but there never was sufficient volume on the breakout. The symmetrical triangle now needs to be redrawn. Watch out for the upcoming resistance at 12.25. There is a possibility that it may form an ascending triangle.

BSC

BSC was unable to move above the 65 and 130 day MA. It went only to as high as 0.39 and moved to as low as 0.34 for the week. The good thing about its downward move was that it was going down with light volume. For the coming days, price may move side to down ward and MACD may try to test the centerline. As of current, BSC is lacking in bullish signals. First it was unable to move above the 2 MA’s, second, RSI went above the 50 level, but was unable to stay above it. In addition, if MACD is unable to move above the center line and subsequently crosses below the signal line, then this definitely is not a good sign.

Technical Insider by Ninodal

Another TA blogsite by Ninodal from the Absolute Traders community. "Technical Insider: a saucy term for "Ipit/s" - a person who used technical analysis to spot area patterns to profit from it but was sadly stuck inside because of greed and impatience". Here you can read on his trades, analysis and stock issues where he is a "Technical Insider".

StockWatch (Sept 24-28, 2007): PSEi, Mining, WIN, SMPH, BSC

PSEi (Chart: Daily Resistance: 3460/3580 Support: 3280)

The index is near the 61.8% Fib retracement at 3460 acting as resistance which is also the 65 day MA. The strength of the bulls will be tested at that resistance level. Now in order for the bulls to win there has to be an increase in buying sentiment. However, on plotting the slope of the On Balance Volume line, it seems that there is only mild buying compared to the intense selling that happened on the downward trend. Probably a lot are still waiting for more signals to confirm the bullishness of the upward move. As of current we already have one bullish signal which is the MACD crossing above the center line. If the index is able to move above the 61.8% fib retracement, this can also be another bullish signal. Also another upcoming resistance would be the lower end of the gap formed last July at 3580. With these upcoming resistance levels and mild buying sentiment on the upward move, it would be best to keep watch of your stops. It’s definitely a wait and see if the resistance will be easily taken out by the bulls.

Mining (Chart: Daily Resistance: 7040 Support: 6370)

Mining sector is very bullish with MACD crossing above center line. The slope of the upward move is very steep accompanied by increasing volume. However, as clearly seen in the chart, the mining sector needs to take a breather. It cannot sustain a very steep slope forever and looking at the RSI, it seems that the breather will happen anytime soon.

WIN (Chart: Daily Resistance: 0.39/0.46 Support: 0.33)

WIN has broken out of a small symmetrical triangle. Target price is 0.50. If the target price is reached, with high volume, this means a break out of the outer symmetrical triangle with a TP of 1.00, but this is still far away and still needs to be confirmed by a good breakout volume.

SMPH (Chart: Daily Resistance: 11.50 Support: 10.25)

SMPH is forming a symmetrical triangle. Breakout above 11.50 needs to have a good volume. Target price is 15.00.

BSC (Chart: Daily Resistance: 0.38/0.40/0.46 Support: 0.30)

BSC showed signs of positive divergence. RSI and MACD logged a higher low, while price logged a lower low. Trading last Friday has an increase in volume. There is no area pattern, so our basis for selling is only the Fib retracement at 0.40 (38.2%) and 0.46 (61.8%).

In Retrospect: BPC

BPC

BPC broke out of the inverse head and shoulder formation. However, the breakout volume in my opinion was not large enough. The upward move without a large volume means there is a lack of buying sentiment. There would come a point when those who are bullish with this stock become depleted and there will be no one else to buy this stock and of course, will naturally cease from moving further up.

On further analysis of the inverse head and shoulder, I think I may have made a mistake in the interpretation of the right shoulder. Inverse head and shoulder should have light volume on the right shoulder’s decline, but the chart indicates that there was increase in volume in the right shoulder formation. This became obvious to me after overlaying the OBV chart against the price.

At point 1 to point 2, we could see the formation of the head and volume is increasing as evidenced by the upward movement in the OBV line. What went wrong with the inverse head and shoulder is that the decline towards the formation of the right shoulder should happen with a lighter volume; however as what can be seen in the OBV line is that it went lower than the point where the head was, which indicates further intense selling during the formation of the right shoulder. This I think invalidated the inverse head and shoulder formation which is currently confirmed by the low breakout volume.

These are the things to watch out on the succeeding days: 1) Watch out for the price level 4.20-4.30 acting as resistance, this is the 38.2% Fib retracement and also the 130 day MA. 2.) Watch out also for previous resistance line (at 3.70-3.80) which is now the support line. Because there is a lack of volume on breakout, the price may re-test that line and if there really is no further buying sentiment, the price may eventually break below that line. 3.) If price moves below that support line, watch out for the previous low of 3.25 as the next major support line.

StockWatch (Sept 17-21, 2007): BPC

BPC (Chart: Daily Resistance: 3.85/ 4.20/ 4.85 Support: 3.25)

BPC displayed a divergence of RSI movement against price. Price has formed a lower low and RSI formed a higher low. The MACD is also showing a slight divergence. There is also an inverse head and shoulders formation in the charts of BPC and the volume is confirming the formation. A significant characteristic of an inverse h&s is that volume tends to diminish from the left shoulder to the head. And volume has to increase during rally after the formation of the head. These characteristics are noticeable in the BPC chart which strongly confirms the formation. The break out price level would be around 3.80-390. The critical part for this formation to be valid is that the volume on breakout should be large. Coming from the bottom, it needs to have momentum for it to be able to propel itself to the target price of around 5.0. If the breakout does happen, expect that the support line (former resistance line) will be tested.