Short term: SRPT is currently trading between the $10 and $15 Primary Trading Range Levels (or PTRs for short) Think of PTRs like you would "floors on a building" SRPT has been busting through these PTR Levels (which on SRPT's Daily Chart) are every $5) ever since April of 2014. Just draw horizontal lines on a daily SRPT chart at $40, $35, $30, $25, $20, 15, and $10 and you will see how this fall has been SLOWED by these PTR support levels. A "rule of thumb on PTRs is that if you BREAK THROUGH ONE (either going UP or DOWN) you have to RETEST that PTR (Almost to CONFIRM the breakthrough).
SRPT looked like it was bottoming out in the $20-$25 PTR Range when it cycled in that range for about 4 months from July 10th to October 27th. It takes POWER (volume in the case of stocks) to "BREAK THROUGH THE FLOOR OF A BUILDING" and SRPT got that volume back on October 27th when it "gapped down" on 15.7 million shares on bad news". the $15PTR Level held until December 11th when SRPT closed under $15 on about 1.8 million shares). It retested the $15 from December 30th to January 8th, but FAILED to climb back above it. When you FAIL a retest of a PTR like that, odds go WAY UP that must test the NEXT LOWER PTR (which in SRPT's current case is $10.
Now if you scan back in time on SRPT you will see a LONG TERM HISTORY of STRENGTH at that PTR so we have a decent shot it will hold.
It BETTER though because if you go all the way back to July 24th of 2012, SRPT has a HUGE OPEN GAP from that date (when it just JUMPED up at the open from $3.46 to $7.36. The sad truth on Open Gaps is that MOST OF THEM eventually GET FILLED. (Proof of that is evident from the closing of the even BIGGER Open Gap on SRPT (from $14.99 to $31.73 on October 3rd 2012.)It was THAT OPEN GAP that finally got slammed closed on November 12th of 2013!
What that all means to your trading? Buying right now is LIKELY premature in the short term, because of the odds of SRPT testing that $10PTR.
Great question Mitch.
Here is how TRADING RANGES really work.
Much like the PTRs that I talk about all the time, when any stock or market index establishes a TRADING RANGE. it is both PERMANENT and CONSISTENT. I mean by that that you can take that specific trading range and PROJECT IT vertically (both up[ and down), and it will be a MAJOR SUPPORT AND RESISTANCE mechanism.
If you attempt to BREAK OUT higher over a trading range, you TYPICALLY HAVE TO RETEST THE BREAKOUT first before confirming the breakout. If the RETEST holds, then you can count on a move equal to at least the trading range itself. If you FAIL on a breakout retest, you will cycle ALL THE WAY TO THE LOWER EDGE OF THAT RANGE!
If you "SKIP" a retest, then you are "DOOMED" to come back and do that retest LATER ON!
CASE IN POINT: The NASDAQ MONTHLY CHART shows a 1400 point trading range. The NASDAQ broke out above 2800 back in Oct '99 but "SKIPPED" the retest. As a result, it came all the way back to do that retest LATER ( Nov 2000). It failed to HOLD on the retest of 2800, and sank ALL THE WAY TO 1400.
To FINISH UP: Can the S&P run to 2350 BEFORE resting the 1550 BREAKOUT AREA? YES...just as the NASDAQ did when it broke out in 1999. BUT...if it does...it will ONLY POSTPONE THAT RETEST! (I think that scenario is less likely BECAUSE of the CHANNEL L:INES on the S&P. We are VERY OVERBOUGHT right now versus the long term CHANNEL LINES, and historically THEY OVERRIDE EVERYTHING ELSE!
-5 points HOMER. for NOT PAYING ATTENTION IN CLASS. I warned of a REPEAT of the 2011 CORRECTION that I projected would OCCUR on or about OCTOBER OF 2014. If you spent more time UNDERSTANDING and less time ATTACKING you would KNOW what I actually said!
LOBSTAH! You must be red as a LOBSTAH about now...huh?
Glad you stayed in SRPT and PROVED that all the TA warnings on SRPT were NOT FOR YOU!
YOU were WAY TOO SMART!
(POORER...but MUCH SMARTER! )
As I told you previously, SRPT was retesting the low of $12.12 from 2013.
MONTHLY CHART: On the monthly, SRPT had 97 million shares volume at that $12.12 low in 2013. On the retest we just finished, we had only about 18 million shares. That tells us "WE ARE CLOSE TO A BOTTOM"; but...we closed UNDER the previous $12.12 low at $12. That tells us we "CAN GO A BIT LOWER HERE". (If we had closed above $12.12; SRPT would've been a STRONG BUY!)
WEEKLY CHART: The weekly volume back in 2013 at that $12.12 low was 64 million, so we also went below $12.12 on LIGHTER WEEKLY VOLUME. (We are OVERSOLD therefore but again since we closed below $12.12, we can go LOWER STILL.)
DAILY: The volume of Nov 13 2013 was 10.3 million, and we went under that on January 12th when we put in a low of $11.33 on 3.5 million. That gives us the same signal about "BEING CLOSE TO A BOTTOM", but once again the CLOSE at $12 signals we "CAN GO LOWER FIRST BEFORE BOTTOMING OUT"
RIGHT NOW we are sitting right on top of an "OPEN GAP" ($10.78-$11.68) that goes back to 8/27/12. Chances are very high we will CLOSE THAT GAP. Additionally, we are cycling within the $10PTR to $15PTR trading range. We broke below the $15PTR back on Dec 11th, and FAILED the 7-day retest of that $15PTR on
Jan 9th. When you fail a retest like that, you almost ALWAYS CYCLE DOWN TO TEST THE NEXT LOWER PTR (or $10 in our case)
Here is a PLAN you might consider...Watch for SRPT to break UNDER the $11.33 low of Jan 12th on MUCH LESS THAN 3.5 MILLION SHARES! Then buy it at the test of the $10PTR with a stop underneath at $9.
Best of luck...Bud
The best way to see a RETEST (and a picture is worth a 1,000 words) is to pull up a Daily Chart for SRPT. Use "CANDLESTICKS" for the price display mode. Then draw a horizontal line at the $15 price point.
You will SEE (and understand) exactly how a RETEST works.
You will see when SRPT "TESTED" the $15PTR (from above it) between Oct 27th of 2014 through Dec 12th 2014. It "HIT" the PTR LINE at $15 at least 4 times in that period but BOUNCED UP OFF IT every time, untill it finally BROKE UNDER the $15PTR LINE on Dec 11th. It came back up to RETEST the $15 for about 7 trading days from Dec 10th to Jan 9th, when it finally GAVE UP, and began what I think will culminate binn a TEST of the $10PTR LINE.
If that $10PTR "HOLDS", then SRPT will cycle back up to RETEST the $15PTR.
All of technical analysis is VISUAL, so my words are going to fail to really teach you much without you LOOKING at the actual price movements (with an OVERLAY of the technicals like PTR LINES to help).
Did you even bother to look at the chart to see if what I said was true or not? NO...of course not!
The "STOOPID" have always laughed at things they could not understand! You are just the latest in a very long line throughout history that "has eyes but cannot see".