Below is what I just said on my message board to my subscribers:
AKS has now broken above the intra-day resistance at 6.50 that I mentioned the last 2 days was a pivotal resistance level. The stock is spiking up and did not generate a gap this morning, which in turn suggests that the gap between 5.86 and yesterday's low 5.99 will remain open and if follow through to today's rally is seen on Monday (likely), it would be a bullish statement as the bears should have been able to close the gap, having seen a lot of selling pressure the last 3 days. If the bulls can manage to close the stock today above the 6.50/6.60 level it will be another positive.
Yes everyone, do calm down. From a chart perspective this move down was "likely to happen" as the recent low at 5.14 had not been tested yet and it is always unlikely that without a major positive fundamental change (and the upgrade was not that) that a stock will rally without some kind of retest of the recent 51-week low.
In addition, the close on Friday was right on the 200-day and 200-week MA's (both currently around 7.57) and the minute the stock closed yesterday in the red, it meant that the 200-day MA was tested successfully and that would "automatically" bring selling from chart traders.
There is good support at 6.00 but there is a breakaway gap between 5.89 and 6.10 that if NOT closed would be a bullish statement as it is a "magnet". If closed, it would not be a bearish statement but it would generate a "slower" bounce up to the MA's lines.
The probabilities of the stock getting up to the $10 level are high, at least based on the chart.
If the bulls can rally the stock to close around 6.59 today, that would be a positive since there is a minor but evident daily close support at that level that if not broken, would be a positive statement. A close above the mid-point of today's trading range (meaning above 6.78) would be a strong positive.
Nonetheless, I doubt either one of those will occur. I do expect the stock to go below today's low at 6.16 tomorrow and get down to at least 6.10 where some buying will be seen because of the gap.
Either way, the action does is not indicative of anything negative. A daily close below 5.48 would be a negative.
What I expect will happen this week is a daily close around the 6.00 level and recovery back up to the 7.50 level.
Good luck to all.
By the way, I have been a chart trader for 37 years and worked as a chart analyst for Prudential Bache, Merrill Lynch and Dean Witter in the 80's.
I don't believe that is the reason for the drop in price. I have been following the price of oil and shorted both OXY and CVX a couple of months ago and made good profits on them. Nonetheless, I am now long both of those stocks (though looking to get out around here) as they reached levels of support and bounced.
The drop in ENG is much more than that. There is no way that the drop in the price of oil, which has been about 28% in value, will have been the cause of the stock dropping 70% in value over 4 months and 37% in value over the past 3 weeks.
In addition, the price of oil has bounced up but the stock has seen NO BUYING interest whatsoever.
It smells big time of some problems that may be happening to the company. If it smells like a rat, and skulks like a rat, it probably is a rat.
ENG has dropped 70% in 4 months and 37% in the last 3 weeks. In addition, the stock has closed in the red on 15 of the last 16 days. There seems to be no buying interest at all.
Does anyone know why this has happened.
I called the company 6 times yesterday, trying to talk to investor relations or anyone that could answer my questions. I got the run-around as I talked to a couple of people but they did not know anything and those that may know something did not return my calls after repeated requests for a call back were given.
Something negative is happening with this company, but I can't seen to get any information about it. This kind of a drop without any news items is not normal.
I went to Yahoo historical prices and they do not show the .76 low. Nonetheless, I have a lot of confidence in my charting service (scottrade) and the chart says it did get down to .76 on December 14th 2012. Just in case my charting service was wrong, I checked 2 other charting services and they show exactly the same thing. As such, I would not have much confidence in Yahoo's historical prices.
GIGM made a new 3 year low this past week, below the previous low seen in December 2012 at .87 cents. Once again the stock closed on the lows of the week, suggesting that further downside below last week's low at .81 cents will be seen this week. The 10-year low has been .76 (.80 on a weekly closing basis), meaning that with the .82 cent close on Friday that the bulls need to generate some kind of buying by next Friday or face the possibility of a chart breakdown. Resistance on a daily closing basis is now found between .92 and .94 cents. I have not been able to find any news to have caused this unexpected weakness, meaning that if it is all chart oriented, some recovery should be seen this week. Expect lower prices at some point this week but a green close next Friday.
Having traded stocks for 37 years and having been a broker/trader/analyst for Merrill Lynch, Prudential Bache and Dean Witter in the 80's, I am very familiar with sell high and buy low.
Nonetheless, deciding where to buy and where to sell is not as easy as it sounds. Many times what looks to be low is not and the stock goes "lower".
Having purchased DCTH around 4.23 and having bought "more" around 2.00 and now the stock trading around .13 cents, buying more low was not the thing to do. (by the way if you check the stock out you will see it is trading at 2.06 but the stock went through a reverse split of 16-1, meaning it is trading at .13 cents).
Fortunately in that stock I originally purchased it at 5.71 and GOT OUT at 15.35, so the stock overall has been a winner for me as I netted $9+ per share on that trade and losing about $3 per share on this trade. .
As far as my charts predicting the action on GIGM, that was not the case and is the reason why I asked if there was any news. This move down to .81 cents has been a" total surprise". I did not see it coming or even thought it could happen.
GIGM got down to .76 cents the second week of December 2012. The lowest weekly close ever though has been 80.3. With the stock closing yesterday at .82 cents, it really is getting dicey, especially since the stock closed on the lows of the week and further downside is likely to be seen this week.
Thanks for the reply but it did not answer the question. I still need to know what news occurred to cause the drop.
BTW, as far as buying when people are selling and selling when people are buying, I have been a trader for 37 years and that is not a piece of advice I need. I have been long GIGM since April but the recent action is not bullish, it is bearish.
I offer a charting service and below are the results of all my "public" mentions for the past 7 years:
Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted.
Status of account for 2008: Profit of $14,704 per 100 shares after losses and commissions were subtracted.
Status of account for 2009: Profit of $7,523 per 100 shares after losses and commissions were subtracted.
Status of account for 2010: Profit of $24,045 per 100 shares after losses and commissions were subtracted.
Status of account for 2011: Profit of $3,616 per 100 shares after losses and commissions were subtracted.
Status of account for 2012: Profit of $3,399 per 100 shares after losses and commissions were subtracted.
Status of account for 2013: Profit of $15,886 per 100 shares after losses and commissions were subtracted.
Status of account for 2014, as of 8/1
Profit of $25337 using 100 shares per mention (after commissions & losses)
Just 8 days ago this stock was looking like it was ready to breakout and 1 week later it has made a new 10-year low and looking like it wants to take a dive.
I have looked everywhere but I cannot find any news that could have generated this kind of weakness.
Does anyone know why this stock has dropped 28% in 8 days?
My name is Tony and I am a chart trader.
I purchased ENG at 2.36 yesterday. I am using a mental stop loss around 1.90 and have a mid-term objective of $5 but a possible longer term objective of $15.
ENG is a stock that 6 years ago in August 2008 traded as high as 18.37. Within 3 months the stock dropped down to 2.19, likely because of some negative fundamental change.
The stock continued lower and on October 2012 hit a low of .35 cents and 7 months later a low of .30 cents, which is now considered a double bottom. Since May 2013 the stock has been in an uptrend and in April of this year the stock broke above the 200-week MA for the first time in 70 months, suggesting the long term downtrend is over and that the stock has now possibly gotten into an uptrend.
The stock got as high as 4.22 in June of this year, likely mostly off of short-covering, and for the past 3 months the stock has been moving back down to test the breakout of the 200-week MA, currently at 2.00.
Nonetheless, the stock got down to the 200-day MA today and is seeing a bounce as it made a new 4-month low today but is now trading in the green and likely to close in the green, suggesting a positive reversal day.
There is still a chance the stock will get down to the 2.00 level as that is where the 200-week MA is at as well as other intra-week lows of some consequence, meaning that level has to be considered decent to strong support. Nonetheless, if the stock is as bullish longer term as the chart suggests it is, it probably won't get down to that price and the 200-day MA will be "it" to the downside.
I am just playing right now for a rally to the $5 level that does offer a very good 8-1 risk/reward ratio at this price.
I do offer a charting service called The Oasis Club. If interested let me know.
Based on the action seen this past week, it seems safe to assume that the recent low at 3.15 is likely to be a bottom to this downdraft.
As such, based on the charts, I will be looking to purchase VG between 3.26 and 3.30.
BRCD has built a strong rounded bottom formation over the past 12 years, having seen a high of 133.78 in the year 2000 then dropping down to a low of 3.59 in February 2003, then a low of 2.05 in March 2009 and a low of 3.18 in August 2011. Rounded bottoms are the strongest kind of base building as they suggest the company has gone through a major fundamental change over a long period of time which is always necessary to be seen after such a huge drop from $133 to $3.50.
During this period of time, the stock had built the top of the long-term trading range at the $10 level with a high in 10.58 in March 2007 and a high at 9.84 in October 2009. As such, the $10 level has to be considered the pivot point in the trend.
The stock broke above 10.58 in March of this year but evidently the fundamentals were not just quite right yet as the breakout was negated just a few weeks later and a drop down to the $8 level occurred. Nonetheless, no support of consequence was broken on the way down and the correction seen was probably mostly technical in nature since the stock had moved up from 5.31 to 10.96 without any kind of correction being seen.
The stock is now rallying back and 2 days ago saw a high at 10.40, which does suggest the stock is ready to break out again soon. The 10.96 intra-week level is the last resistance left (10.50 on a weekly closing basis and 10.84 on a daily closing basis) and if the bulls are able to get above that level, the stock is likely to run to the upside with $14-$15 as the first objective. Nonetheless, a breakout of this level will probably generate a run up to the $36 level over a period of 6-12 months with some resistance also being found at 25.00.
Support is now pivotal at 8.89 so any purchases made should use an 8.79 stop loss.
I appreciate your response but chart-wise speaking I have it clear. I am a very experienced and knowledgeable chartist with 37 years of experience and having been a chart analyst for Prudential Bache in the 80's, I am able to make good chart evaluations.
Nonetheless, as you know the bottom line is always fundamentals and based on what has happened chart-wise to this stock, it should not be back at these levels at this time.
It still has not done anything that is truly negative but there must be a fundamental reason why the stock has not yet fulfilled its chart outlook and that is what I am trying to uncover. Why this company is falling behind. It is the competition? Is it the industry that is failing? Is it the company that is not moving forward as it should be?
That is the kind of information that I am asking for.
I am a chartist and I looked at this chart for the first time yesterday and there are some powerful chart reasons to be a buyer anywhere between 3.08 and 3.15.
The 200-week MA is currently at 3.08 and that line is alwasy very important. The line first got broken to the upside in June 2010 and the stock rallied up to 5.39 where the selling appeared that took the stock back down to the line, at that time at 2.00, and below the line for 15 weeks before the line was broken to the upside again and a rally up to 4.94 occurred.
During the last 2 years the line has held strongly even though it has been seen again on 4 occasions and this time will be the fifth occasion. Simply stated, the 200-week MA has shown itself to be very important.
My question is as follows, "what has happened fundamentally over the past 6 months that has caused the stock to come back down to this line?"
Though the line is considered decent support, the reality is that coming back down to the line now when the indexes have continued to move higher this year is a bit of a negative and I want to get an idea of why that has happened.
Please, only responsible replies! BS is useless as I can smell it a mile away.
Just a short update:
The stock has now generated 8 red weekly closes in a row and the probabilities of a green close next Friday are high, especially since the stock closed slightly above the mid point of the week's trading range, suggesting a higher probability of next week going above this week's high at 4.53 than below this week's low at 4.18.
The upside objectives remain the same with 4.75, 4.86, and 4.99 as the likely objectives. Nonetheless, the probability is that the stock will get up to 4.75 and no further.
Nonetheless, the bulls have accomplished nothing positive, in fact today's close here at 4.39 has now built a triple bottom on the weekly closing chart, increasing the chances that it will be broken within the next couple of weeks since multiple bottoms rarely hold up.
The indexes will be rallying next week based on Friday's action and though I do not know how much of a rally to the upside will be seen, I don't believe it will be much, meaning that ARNA will not be getting a lot of help from the overall market.
I continue to believe that ARNA is heading lower but for the next week or two it could move up a bit to the levels mentioned above.
That is what the chart is saying.
I have to laugh at the fact that the 2 posts that I have placed here have had 10 times more Thumbs Down than Thumbs Up. It is par for the course since real but negative information is usually not appreciated. People like to dream and support those that nurture those fantasy's.
Unfortunately trading the stock market requires real money and losing it hurts. Fantasy dollars cannot be spent.
I still remember the first time I went to the IV ARNA board in July of last year when the stock was trading at 7.30 and "stated" that the stock had broken important support and was likely headed to the 200-week MA, at that time around 4.35. I was dissed, laughed at, and ridiculed and certainly got 20 times more thumbs down than thumbs up. Lo and behold the stock dropped to the 200-week MA and every critic had their mouths agape that I had predicted it would happen and that it did.
I did get a lot of Thumbs Up when I said the stock was then going back up to 7.50-8.00. I did get quite a few Thumbs down when I said the market was heading back down to the 4.70-5.00 level but not as many as the amount I got in July.
Bottom line, everyone of you bulls have been spinning your wheels for the past year and your money has not been working for you, in fact it has been working "against you". The subscribers of my service that followed my mentions made $7 per share profit on a $7 stock in less that 10 months.
Keep on laughing, you are only hurting your own pocketbooks.
Let me state it unequivocally.
Fundamentals are the basis for any stock. Charts only show what the players in the game are doing and then only for a short period of time.
Nonetheless, the "real" fundamental picture is not always known by the public. Thousands of cases have occurred where the fundamental picture was different than what everyone believed it was.
Secondly, fundamentals are usually in play only a few times a year (earnings and news events). The rest of the year the traders are simply trading a stock from Point A to Point B (support/resistance) just simply to make money every day of the year. Most traders are NOT interested in the fundamentals, they just want to make money every day and use all the tools they can to accomplish it. Try buying into a computer related selling spree, you will find yourself underwater fast.
Last but not least, a lot of stocks, especially biotechs like ARNA is, are difficult to measure the real value of the stock. With no tangible assets, mostly losses, and an uncertain future, the price of the stock is speculative. Can you make a clear fundamental case for this stock being valued at $2, at $4, at $6, or at $8? No, you can't.
Most of you based the valuation on where the stock was previously, what has happened in between, and where it is now. Simply stated, if things are better than last year the stock should be higher than last year. False! because last year's price was not established as true value. ARNA traded as high as 20.67 in 2006. You mean to tell me the company and the product was better then than now?
This is what you guys have to learn, especially when trading biotechs. A GE or a WMT has established value due to inventory, profits, costs, etc. ARNA has no such thing.
ARNA has closed the gap at 4.20 and that is a big negative since the gap was generated off of a better than expected earnings report in November and even a much better than expected earnings report that came out last week has caused the stock to go down to close the gap instead of rallying.
As such, the weakness is unexplainable and suggests some problems exist with either the company, the management, the product, or the demand for the product.
The bears are in control right now and the bulls on the defensive without any fundamental reason to buy at this moment. The stock is trading well below the 200-week MA, which is a long-term negative that has not occurred to this degree since 2012, suggesting that the traders are now uncertain about the long term prospects for the stock.
Even though some buying could be seen here between 4.05 and 4.20 for a short-term bounce and a rally up to 4.75, it is likely to be short-lived and perhaps not even happen since It doesn't make sense for the bears to let the bulls build a double bottom. The momentum is to the downside, the gap that was supposed to be a sign that the stock had bottomed out in November has now been closed, and technically speaking the bulls have lost their "mojo".
I am now even more convinced that the 4.05 level of support will be broken, either now (more likely) or after a small rally, and that the bears will shoot for the 3.57 level that would suggest a 10-year rounded bottom is being built.
Sorry to be the messenger of bad news but this is not an opinion just a chart evaluation based on my experience of technical chart trading.