Funny, hopeful, but deluded. There is massive supply in the background; March 7th. Supply has proven itself and therefore price can fall without any cause or reason or volume. The stock is predominantly owned by the public now and the larger interests are just waiting on the dumb-money longs to cannibalize themselves back down to the $5 area.
Although the recent SA article by Charles is entertaining reading and probably a correct read of the fundamentals, there are supply and demand forces manifested in the chart which should not be ignored. On March 7th this was manipulated to a high of 11.40 and was aggressively sold off. That day marked a trend change on the daily chart. Demand was exhausted and Supply proved itself. Since then the founder sold off 1.5 Million shares ($13M) and the stock has trended lower.
On April 11th it printed a low of $8.36 and for the last 8 trading days has traded in a tight range.....building cause for lower prices. Why lower prices? Because Supply has already proved itself, there is Supply (selling ) in the background. It will continue to trend lower until there is another trend change which can only happen once 2 things happen......1)supply (selling) drys up and shows it is done with a low volume test of key support and 2) after a trading range, demand proves itself with a sign of strength.
The first key support level that needs to get tested is 7.35, the low of March 6th, prior to the enormous gap of March 7th. This will get tested. No doubt about. Gaps that large do not go unfilled.
The second key support level is $5.94, the low of Dec 20th, another gap fill.
The smart money had the opportunity to sell out on March 7th. 10th, and 11th, including the founder. There is no reason to buy until they do, and there is no reason to think they will buy until at least the $5's. In the meantime, longs are playing with fire and should be selling the bounces.
Sentiment: Strong Sell
don't see that it bounced off the February high, $8.60. Still under it.....Thursday's close 8.30.
"Huge box"? Aren't they all the same size?
I thought your target was your favorite MA; the 39-week SMA, now at $6.93.
What I saw Thursday was another "spring". This time below 8.12. Could see a little bounce, but springs in downtrends fail.
As you may know, I've been trading this predominantly on the short side since 2011 when it was in the 19's. This is a certified POS.
Buying flags, buying the dip, in a downtrend does not work. March 7th was a game changer.....a huge sign of weakness....a change of trend.
You had me concerned because I know you know how to pick your spots. I may have been right this time but of course the truth is we cant know for sure.
Thanks Michael, glad to know you've seen the light. This is one disturbing enterprise; always has been.
Quote from Market Watch article "Is Marc Faber right that U.S. stocks could crash?" by Micahel A. Gayed:
Sure, the bull market may be intact, but I would much rather position where the payout is highest. From a trading and tactical standpoint, the payout is higher in two areas and two areas only, in my opinion. The first is on the notion that U.S. high-beta large-cap sector names are next to BREAKDOWN meaningfully.
WHR is a U.S. high-beta large-cap.....hmmm.
Thanks. Yes, I see your "flat spot". That's also in the neighborhood of the AB=CD target of 7.19. A = 9.69 on Apr 4th, B = 8.12 on Apr 15th, C = 8.76 on Apr 22nd.....then D = 7.19. A 1.272 extension would put it into 6.76 and the 1.618 extension would be 6.22 (into the next gap).
Doesn't seem to be any pre-earnings demand. If they manipulate it higher on the numbers release I may have to get short again.
I listened too. Didn't get much out of it; I just wanted to hear if Michael would be right about him over-using the word "amplify"....and yep, he did, along with "accelerate" and "resonate". But what can you expect? Hoby can't say for example, "it was a real poopy quarter, we lost money for you guys again, we'll try not to drop another stool next quarter".
No fill on the buy-2-cover. Oh well, will probably be shorting more at 8.35 tomorrow. 8.75 was probably a gift. Simply amazing that anyone would pay up for this.
I know you want it to go into the dbl-digits so you can sell at break even, but the low 9's are a strong ceiling for many technical reasons and where the founder sold 1.5 million shares a couple months ago. You may wish to set you sights a little lower but don't think about it too long this opportunity for you will be brief I think.
Sounds like you are on your way Jim. There are timeless principals in that book. I encourage you to continue.....learn about the Wyckoff Wave Chart and the 3 principals: 1) Supply vs. Demand 2) Effort vs. Result 3) Cause vs. Effect.
You could get a bounce but remember that indicators only move in reaction to price.......the tail does not wag the dog. Ask yourself, what is the direction of the trend? Is there supply (sellers) in the background?
Could be. I mean it is bearish, right? There isn't any stopping action yet, no indication the selling is over, no building of cause, no sign of strength in the right hand side of a trading range. All of those have to happen first in order to label it bullish.
The March 6th swing low at $7.35 was on 928k. On April 30th it tested it on 397k and bounced. Then tested it again May 6th on 415k, and held under $7.35 with a low-end close. Supply has not dried up.
Probably a good chance it''ll get into that SOS bar of 12/23 with high of $6.87 which was on 1.025M shares. It might have to build cause to work thru that bar and get to the low of the 12/20 bar at $5.94 (a complete gap fill). The bulls need the volume to dry up going down there to show the supply has dried up and then they need a trading range (a building of cause for higher prices).
I'm on the sidelines too. Got out of last short too soon but I'm traveling this week and couldn't be distracted by it. Seems to have paused at the 200-day SMA.and volume slowed. Could bounce some but I'm looking for an eventual gap-fill down to 5.94. Then a trading range between $6 and $8 could provide some profitable trades.....but best to trade with the trend; bearish until proven otherwise.
Went short again this morning, May 14th, at $7.45. Currently trading at $7.23. Intraday it has established a trading range between 7.22 and 7.30 with springs down to 7.21. With supply in the background the springs should fail and the LOD should hit near 7.11.
On a daily basis could see $5.34 coming if the AB=CD plays out. A=8.94, B=6.72, C=7.58, then D=5.34.
The C-point, 7.58 was a 38.2% retracement of the A to B move. Since that seems to be all the bounce it could muster, good chance it will extend the full 100% down to 5.34. The volume to the downside today is looking good. Going to want to see some heavy volume when it comes down into the B-point at 6.72. If not, could build more cause in the trading range between 6.72 and 7.58.