GCU ready for a big move?I put together a piece on GCU, I hope it will work out.
The outlook for GCU from a technical point of view is looking better and better by the day.
First let us look at the daily chart and turn to a weekly chart later on.
The chart tells us that clearly the bottom was in at the end of 2014 at which point the smart money was moving in, grabbing the cheap shares. From there on a strong move up started that brought GCU towards the resistance zone at $0.225. After GCU at first suffered a very minor setback it cleared the zone and charged higher like a hot knife through butter.
If we look closely at the chart we can identify some sort of reversed head and shoulders pattern that bears a price target of around the 0.39/0.40 level. This price target puts GCU back at the highs made last year which would fit very well from a technical angle.
Should GCU reach this level, the conditions in the chart will most likely be glowing red hot and a correction will then be long overdue. The move this last Friday was accompanied with a huge spike in volume so some follow through next week is expected. The current strong momentum in GCU could take it up to the target zone within a couple of days.
The bigger picture is only just starting to heat up.
The chart below paints one hell of a ride for the investors involved with GCU. What is quite interesting is the similarity between the price movements back in 2009 to 2010 and the current situation from 2013 to this year. The outlook for a very, very big move up is there.
At the end of 2014 and the beginning of 2015 we see an enormous 2 week selling pressure that could be identified as an exhaustion move. All the sellers are done and the week after this move the ‘smart money’ or strong hands thankfully excepted the opportunity to gobble up the cheap shares.
The ongoing buying resulted in a first important buy signal when the share price moved back above the 50 w. MA. A signal for long term investors to start paying some attention. We see that the volume in the up weeks exceeds the volume in the down (consolidation) weeks which is very positive. The first resistance of importance can be found around the $0.40 to $0.50 which coincides with the resistance zone and price target portrayed in the daily chart.
The moment this resistance is taken out we could be off to the races based on the similarity between 2009/2010 and now. Back in 2010 we saw a breakout above the last high after which the price caught fire and rocketed higher. Within a couple of weeks/months GCU went from $0.40 tot $2.50 and after a small consolidation even to $4. If we compare the volume back then to the current buying volume we see a huge difference, the volume is up a lot the shares are now more actively traded.
If history is to repeat itself we should see same very interesting months.
The technical conditions in the weekly chart are perfectly aligned to support the breakout above the resistance zone.
- The RSI hasn’t reached overbought territory yet and even after it does it can stay there for quite some time
- The buying pressure is only just heating up and has enough upside potential left when compared to the positions is reached in 2010.
- The ADX is only just bottoming out and it has to the move back above the 20 like it did in the midst of 2010 to fuel the uptrend
- The MACD is at the same levels where it was in 2010 just before the explosion upwards
- The Money Flow is at very comfortable high levels and looks to stay there.
All in all the second half of this year could bring some exciting fireworks for GCU investors.