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"The market is a treacherous and fascinating game. I am a player and this is the quiet place i go to pen my thoughts and emotions."

Thursday, August 24, 2006

Chart: Fung Choi

ChartThis stock displays the typical symmetrical wedge formation. A break from the upper or lower trendline will signal a bullish or bearish stance respectively.

As we can see from the chart, the wedge has broken downwards with significant volume. I suspect the price will visit the support of 0.695 in the coming weeks.

Hope this helps!


It seems I did not use the updated chart to do my analysis. The chart was not updated for today's price action- the price broke down further with even higher volume. Anyways, today's price action confirmed my previous suspicions that the price will test 0.695.

The next question is: what is the new advice I would give base on this new infomation?

I am a firm believer that an over-deviated price action will always result in its return to the mean - this is where opportunity resides. The price broke the 2.0 lower bollinger band with much force. I suspect it will test the previous low of 0.625 before rebounding slightly back to its mean again.

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