Monday, January 08, 2007

My amateurish longcheer analysis

This is my attempt at predicting price movement. Pls don't attempt to follow this, caveat emptor!


Longcheer is going to touch the bottom channel trendline. This trendline happens to be the ema20 days and it had been tested 3 times as shown in the chart. SO, it should be a significant dynamic support line and I believe it should hold. A possible alternative is that it might go slightly below and whip back up on what is known as an exhaustion gap. Both will still be a bullish sign.

Longcheer's most recent price decline is followed by low volume, so it's a good sign. Why? It means that sellers are not in full force, because if they are, the price decline will be followed by substantial volume. This decline is probably due to lack of buyers.

MACD...not good in this but i'll try. Looks like more downside to come as the MACD is crossing down the signal line. But if you look closely, signal line is reversing its downtrend. A likely scenario is that MACD will hit signal line and bounce up from there. Momentum chart is the same analysis as MACD.

Stochastic don't look good, more downside it seems. %K line slowing down its downtrend but still far below %D. Looking at the past, %K line will likely hit 20% support line and rebound, but there's still some distance to go before hitting 20%. A much more likely scenario would be the exhaustion gap I mentioned earlier instead of the rebounding off ema20.

RSI is more vague. Half a reversal signal is shown. A reversal to the uptrend is shown by higher highs and high lows, so looking at the chart, it seems there is a new but higher low in the making. If rsi goes up from there and shoot above the peak, it will validate the signal.


Loncheer have more upside to come. Tmr is a decisive day to see if the scenario is an exhaustion gap or a rebound off the support line. If you have good risk appetite, buy now. If not, can wait (like me) for double, triple confirmation before buying.