RE:Chart Analysis & RealityHi yyzflex. Thanks for the post. It certainly goes without saying that we have all been waiting for news for a long time and that news, when it occurs, will move the stock. I also agree that the stock could certainly move back to its prior 9/10 support... or lower... or higher. I would like to proclaim that we have seen the last of 9/10, but I think we retail investors simply lack relevant information to make informed judgments on short term share prices. Thus, in the meantime, with institutional investors holding tight, I think short term prices will continue to be set by retail investors based on emotional decisions and speculation, in the absence of news. And, as you note, this is a good time to accumulate the stock, as you did.
Absent a knowledge leak, presumably emotional and speculative trading explains WOF's 44% share price increase last Friday. Nice time for you to have taken a gain from your 09/10 cent accumulation! And this from a company with no current earnings or ready capital! It is for these reasons that I do place some credence in technical analysis and chart patterns concerning WOF.
Technical analysis is premised upon historical trading patterms developed by human emotional response to "everything" that makes people buy and sell stocks. In this sense, if lack of earnings and capital were the sole determinant of stock price, WOF should currently be at zero, not up 44%. It seems other considerations have kept WOF in a tight 9/10 range for the last 6 to 7 weeks with no signficant downward spike trades. Do I know what considerations? No. But was this multi-week 9/10 trading range significant in technical analysis (TA)? Yes. It suggests significant technical support at that trading range. Of similar current technical significance is the material change in the level 2 demand for WOF stock at current and higher levels over the past few weeks. This supports technical trade momentum. Also signficant to TA is WOF's noteworthy incremental rise in its Relative Strength Index readings, amonst other technical indicators. This brings us to the possible rounded bottom breakout pattern which WOF appears to be following, as noted by earlier chart posts.
I post chart information for informative, not persuasive, purposes. Stated differently, in this case, TA recognizes a rounded bottom breakout chart pattern, and WOF appears to be following it. I leave it to the reader to interpret the accuracy and significance, if any, they place on this information and what to do with it. As for me, TA is simply another potential piece in a greater puzzle in trading WOF, and this trading pattern may, or may not, be confirmed. One way or the other, I, like you am a long termer.
I can understand your skepticism of performing TA on non- perfoming stocks like WOF. But, from my perspective, TA is the most well suited tool to apply when emotion and speculation, rather than news on fundamentals, dictate short term share price. Once again, thanks for your post.
Cheers! Seg.