Support LevelThe purpose of this post is to determine at what price level there is support for the stock.
I came across what are known as Renko Charts:
Renko Chart is very helpful when determining support and resistance levels and it isolates the underlying price trend by filtering out the minor price changes. Looking at Futura's price chart, it appears that 4 cents was a long-term resistence level and now, because of the recent breakout, it may offer a good price support level.
On Friday, about 1 million shares were traded and I feel the support was tested at 4 cents. The price did not go lower, and thus far, it's encouraging to see selling being absorbed at 4 cents.
https://stockcharts.com/h-sc/ui?s=FUT.V&p=W&b=5&g=0&id=p67865356092
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Another case for support at 4 cents, comes from this chart:
The 50 day moving average is watched by some as indicator of support. It sounds simple, yet that's how some investors play it.
Some investors watch the 200 day moving average to gain a longer term-perspective. For Futura it has had merit in the recent past. The large 22 million stock trading day back in February 2011 crossed this longer-term moving average. In May the stock price touched and bounced off this line.
As compared to the 200 day MA, the 50 day MA in the past stayed more in the background. Maybe now, the 50 day MA will be viewed also as a support level, and something to move up higher from. The Globe and Mail, June 22nd Page B15 had an article about moving averages.
Analysts say it often better to look at the 200 day moving average in conjunction with the 50 day moving average. When both are trending higher and the 50 day is above the 200 day, it's usually a bullish sigh of market strength for a stock. When the 50 day crosses above the 200 day MA it's called a "golden cross". For Futura it was in February.
For any sell signal, the opposite must occur. There is no sign of the 50 day MA even dipping down towards the 200 day MA for Futura. In the absence of any news it will be interesting to see how the market views Futura over the summer months.This could act as a guide for the stock's future direction.
https://stockcharts.com/h-sc/ui?s=FUT.V&p=D&b=5&g=0&id=p44410564148