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  • danevansrealtor danevansrealtor Oct 5, 2012 9:10 PM Flag

    Today’s Candlestick Patterns: High Wave Bullish Hammer

    For those interested, take a look at the daily chart for the last 6 months using candles. Find the last few candles that looked like today's. Look at what was happening with the stock going into those candles and take a look at what happened afterward. Post here to share with others.

    As another charting exercise, use the same chart (or the 3 month one) and overlay the 50 day simple moving average and the 200 day simple moving average. Let me know when they should cross forming the Golden Cross. You may want to actually draw the lines (graphically, or by printing the chart and using a straight edge). Please post when you think the Golden Cross should occur.

    A final exercise would be to overlay the chart with moving averages ranging from 12 to 30 one by one and see if you can tell which best represents support. I previously said the 13 day moving average looked like support, but I don't think that is the best one (I have been consistently expecting price moves a little early... they have come, but not as quickly as I have projected... perhaps thinking with my heart at least a little bit). Someone on Twitter posted that the 20 day moving average was acting as support. I like to plot the 21 day moving average sometimes when I do TA. Plot various ones and post what you see. Let us know what this would mean going forward if the trend continued.

    The title of this topic was taken from American Bulls. Here is what they say about today's candle pattern: "Bullish Hammer Pattern. This is a bullish reversal pattern that marks a potential change in trend. However, its reliability is low and it definitely requires confirmation."

    If the stock had closed 2 or more cents higher (it was trying, but was painted down a bit right at the close), it would have formed what I learned as a "dragon" pattern (small white candle with a long tail). I find dragons to be one of the most reliable short term reversal signals you will regularly encounter. Over the past 6 months, I didn't see any true dragon patterns, but there were several of these (almost dragons... long tails but the candle bodies were either flat or red/black because the stock closed at or slightly below the open). Look for yourself and let me know if you see it differently.

    I really hope some people will do some of this and post here what they see technically. Please share your own technical analysis suggestions as well. I don't think it will jinx us, because this isn't really about retail investors anyway.

    After any TA, it is important to analyze whether the TA makes sense given the fundamental situation for the company. I would love to hear thoughts on that (this is where the bears can really weigh in!).

    Also, if you have been trading the stock actively, or trading the options, or just watching closely. Please consider sharing anything you have noticed that may be a clue to where we are going. I have a couple of tidbits I can share, but I would love to hear from others first. I'll give a little if I can get a little from others who may be reluctant to post. Transparency and sharing can be a friend to retail investors. There are still games being played. Have you seen some of them?

    I'll summarize what it looks like to me. Longs should have a great couple of weeks ahead!

    Several of you have thanked me for my posts. I appreciate the encouragement. When I first started frequenting this message board several years ago there was a wealth of great information. You didn't have to wade through nearly as much to read worthwhile posts. I really appreciated then, and still appreciate the opportunity to learn from people with a variety of perspectives. I hope some of what I share is helpful to some who read it. For many, this stuff is beneath you. For some this may open your eyes to new ways to analyze investments. I am still learning. My experience here will be a major lesson for me. I hope it ends up being a learn while you earn situation and not one of those very expensive lessons (actually has been both already)!

    Have a great weekend! Good luck to all longs!


    Sentiment: Strong Buy

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    • Dan,

      Regarding the candlesticks, I see the same sort of pricing variability (small variability, as a percentage of share price) occuring in the first week of August. The volume pattern was similar in that week to what we saw this past week. So this suggests that the price will begin to increase dramatically this coming week.

      Now, as others have said on this board, charts don't move the price. However, they are useful for finding common trading formations and repeating patterns that are rooted in trading psychology that can be used as a guide for predicting future price movements.

      All chart signs appear to be positive, imho, and are consistent with SVNT's opportunity set.

      Regarding Golden Crosses: They are reliable about 80% of the time. A few months ago I invested heavily in Exide when they were about to have a Golden Cross. They had four(!) previous GC's in the past few years and I thought I'd give them a try. But the long and short term averages just came close to meeting, and then backed apart, and I lost a small amount on the investment. Good lesson to learn. I think Cup And Handle is a more reliable pattern.

      Looking into my crystal ball, I see the share price increasing gradually the next few weeks, perhaps back to the $2.90 - $3.00 range by 10/19. If we get favorable EU news later in the month then it'll skyrocket.

      There won't be any EU partnership or buyout deals until well after a EU announcement (favorable or unfavorable) is made. Partnership / buyouts will occur in 2013.

      Comments / criticisms ?

      GLTA Longs!

      Jim M.

      Sentiment: Strong Buy

    • I'm learning too. What I see is that the option traders are getting giddy thinking about the boat loads of $ they will make when the stock goes to $3.00 or higher. But everytime they sell some of the options they are bringing the stock price down. Its not their fault. Its just the technicals working.

      The stock price shot back to where it was pre Tang lawsuit. The ones who got in at .58 and above did well up to the current levels. The ones who got in at 2.92 and below are hurting some.

      For me its all about revenues. Without them SVNT will be in bankruptcy in 2 years. Someone else will pick up Krystexxa if its got any value. Thats questionable to me at this moment. Only sales will convince me otherwise.

      The charts are interesting to look at, history repeats itself, yadda, yadda, yadda. But the cup was formed when Tang filed the suit, and then it got thrown out. Nothing else has really happened since then. The stock wont move because of the charts, the charts will reflect the movements of the real or perceived values of the stock.

      If I see something different I'll change my opinion. I'm still learning.

    • Dan and few others, Great posts Thank you.
      Just to play along, 20 DMA seems to work for support. I like the volume action in this consolidation. Dried up at the lower days , now with more bullish pattern formation..... it's increasing.
      200 DMA for the first time in 2 years just turning up, I'm expecting Golden Cross on Thursday.
      I hope you right in prediction that we will move up even without news.
      Well, one thing is for sure, we are entering very exciting time for our investment here.


      Sentiment: Strong Buy

    • Dan, I would also like to Thank You for your very informative posts. I like to learn and you have me looking a little harder at the charts. I primarily look at forces for momentum, which SVNT has plenty of. But now I'm looking a little closer at what you are explaining. Keep those posts a coming. Plenty of investors, like me enjoy reading them.

      Sentiment: Strong Buy

    • Of course, as you have seen, I have been waiting for the golden cross. Today I tried to figure out when we will see this. I was thinking next Friday or Monday after. I may be off a day or two, but know what is coming. Great strength should be seen coming up soon. Would like to see $2.50 or so before the cross happens. I think we make it back to the old highs of 2.92 or so off the cross. See if we can then couple that with EU news a week or so later. Leads us right into earnings...the big question.
      Anyhow, I'll try your other suggestions, love checking this stuff out and see what happens.
      IMHO the Oct $2.50's look like a good shot for short term gain. I have a ton of March 2.50's, like these a lot.

      Have a good night, thanks for the great post!

      Sentiment: Strong Buy

    • Good post. I think some would call you a sleeper.

      I bought at .58 cents so i am in a good spot.

      There are too many good things about to happen to not be part of SVNT right now.

      Candlesticks, high wave bullish hammers and dragon patterns? Did you play dungeons and dragons when you were younger?