I may be wrong -- wouldn't be the first time -- but judging by the tape, today's trading action may indicate that DROOY is setting up for a breakout to a new mid-term high.
As I say, I may be wrong, but the action and the spread is intriguing. Whatever the case, DROOY is rising on much larger volume than yesterday. Once again, big volume on the up days, but smaller volume on the down days. I'm sure one of the many technicians here can offer helpful stats to clarify the hypothesis, but that type of action is normally a sign of accumulation outpacing distribution, meaning a stock is moving into stronger hands and therefore has a better chance of going higher.
I'd appreciate someone's technical perspective on the recent trading action. Thanks.
Looks as though Durban Deep is in the process of forming what is known in PnF charting as a Bearish Signal Reversal. Esentially what you have are lower lows and lower highs with the stock trading above the primary trendline which DROOY certainly is. The current column of X's is the seventh column which is the minimum requirement for this formation.
The chart that I've constructed has 2.77 as the breakout which would be a clear and easily recognizable violation of the intermediate bearish trendline that has been keeping the lid on all these lower tops.
2.77 today and that is a PnF buy signal.
There's one version which IMHO would be very bullish indeed.
Thanks, and I must ask, how does accumulation versus distribution fit into the equation? Does an overabundance of accumulation make the possibility of a Bearish Signal Reversal less likely?
The recent massive accumulation in DROOY is what really interests me and it would seem, at least to me, that stronger hands decrease the potential for a bearish move. Frankly, I never had enough patience to fully study technical analysis and its myriad parameters, so most of my investment decisions have been formulated through psychological analysis, and I place greater weight on developing trends within the gestalt of the psychological environment of a stock or the markets.
Many thanks for your technical perspective, however. I do find it fascinating, so I'll be waiting -- along with you -- for that $2.77 level to be broken.