HDY has been bouncing consistently off of the 1.30 support line, this proves to me that the intrinsic supply & demand point has established this price area as being mainline support as well as a price bottom..
Pattern Analysis
What we can see is a few things
- Text book Ascending Wedge
- Gap to $2 to fill.
- the 5th point of the 5-point Ascending Triangle confirmation pattern line is due to touch come Monday.
- Morning Star Pattern formed in the past 3 days of trading, as well as a bullish engulfing pattern. Both being strong reversal candle patterns.
Volume Analysis
- Above we can see that Accumulation/Distribution & On-balance volume have been oscillating in a range with HDY's price action, this downward sloping trend in volume (light volume since gap down as well) is confirmation a large move is to come, and based off of the chart it looks like a bullish pennant for the volume pattern.
- The supply of HDY on the market has been meet by serious demand in the low 1.30's, volume dictates an over-extension in supply, and bears are loosing power and grow tired. Also there is a 25% short float on the stock, this means shorts will cover once bears loose steam, bringing a major short squeeze play into play. Which will blow HDY's PPS close to 1.80. The continuous decline in volume ended Friday with a 11% gain on 12.4 million shares. That's huge when AVG volume is 3 million shares.
Volatility Analysis
For volatility analysis we can see the following
- Contraction in volatility, squeeze is in progress, this will expanded either upwards or downwards, and oscillators and momentum indicators strongly suggest upwards.
- %B indicator shows bounce and should easily pierce 100 line upper band tag.
- A move is coming soon. Volatility would indicate another swing upwards short term.
MACD Divergence
We can see a massive divergence signal in HDY's price action as well as its MACD histogram reading. This is a high bullish indication for HDY and also further suggests another run int he equity.
Overall HDY is flagging a buy on many more indicators and analysis methods, i only covered the more important ones. I believe HDY is poised for another major run here shortly. I do currently own 125,000 shares of this company, i purchased last week as well for a nice swing trade.
Position: Long
Target Price: 1.72-1.80 (High) 1.63-1.70(Low)
Thanks! Appreciate you doing this article. Been pt trading only since Oct. 2011, and just getting into TA. BTW, posted that dumbass message last week as a knee-jerk reaction to all the shares you have in HDY. I was holding 10K shares bought at 2.06 the day AH PR came out about the well. I couldn't sell as it dropped.....I'd specify a limit price, post the order, and SP had already dropped lower. Couldn't sell til 1.36. Lost 7K bux in about 3 minutes. Shook me up pretty bad. Okay, just wanted to share that.
ReplyDeleteHey, another thing......A few days ago, Friday I think, the SP dropped to 1.25. Later you posted on StockTwits that if it was going back to 1, it would have done it that day. What was your level of tolerance? I have 4K shares in now bought at 1.35, and I was getting nervous. If it had continued to drop, at what point would you have cut your losses??
ReplyDeleteHey man no problem i appreciate conversation + comments!! My level of tolerance is completely indicative of the volume+ supply and demand of the equity that day not the price spread, if it HDY falls below 1.23 on heavy volume that that may be a warning sign to jump boat. haha
ReplyDeleteHey thanks, helpful advice. Doin pretty well so far. Part-time status means I miss some opportunties when quick spikes occur.....But I'm def into it. Want to learn TA -- might have to wait til I have more time. Any suggestion on best way to approach that aspect to trading? Last fall starting-out, I was basically a bargain hunter in energy stocks. With those huge swings, it wasn't too hard to buy low on a 10% dip. I'm finding this to be a tougher market. Made a good move with LEE this week, and prob will sink some bux into DSCO. DSCO has a rock solid bottom and gonna get pumped good by a biopharma writer. Cheers!
DeleteMy system is pretty nice, alot of different approaches as you saw in the article, your goal should be to use volume to identify the supply & demand per equity, in turn you can analyze true demand/supply versus over-tension of supply, manipulation via demand.
DeleteIn addition use a combination of trend/momentum oscialltors/indicators to figure out the equites realtive direction is within the trend (once you have identified the trends direction accuratley) i.e dont use a ROC or RSI unless the trend is trending, i.e dont try to catch a falling knife with indicators.