Connacher Oil & Gas Ltd CLLZF

RE: RE: Moreover...

[Wellsitter]

I wish I knew how to paste charts so I could illustrate what I'm talking about.

There is no technical significance to the number $1.17. If you look at a one year chart and draw a straight line across the bottoms (the lowest prices occurring in the past year) you get the bottom trend line. As time passes, this line continues to extend and if the price of the stock keeps moving higher then the bottom trend line value keeps moving higher too. If you drew the line and then look straight down from today's date, you would see that the price would currently intersect the bottom trend line at $1.17. Monday it will be $1.18 and by next Friday it will be somewhere around $1.25 as the line continues to extend with time.

In any chart, the fundamental (first) entry is to establish the trend channel (draw a bottom trend line and then a parallel upper trend line). Over a period of time, it is 85% mathematically probable that the price will stay within these two lines. Sometimes a trend channel lasts for a few weeks and some for considerably longer. The current trend channel for CLL is nearly a year old with the start in July 09 and the second touch in late Nov. 09.

In terms of support, the lower trend line, when it coincides with a fibo support point, is extremely robust just as is the case with an upper trend line that coincides with fibo resistance. Technical traders love nothing better than to see the price of a situation coming off of a lower trend line/fibo support touch because it's a virtual certainty to make the run to the next fibo resistance.

As for the danger of getting back to the lower trend line, I don't think it's high either. We have light support at $1.36  and then significant support at $1.21. As I said earlier however, the price ALWAYS comes back to the lower trend line and sometimes penetrates in a fundamental change of direction. All we can hope is when that happens, the lower trend line is up around $3.00!