TSXV:RTI.H - Post by User
Post by
Millennial2000on Feb 04, 2018 11:51pm
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Post# 27501143
Price movement on no news presents these scenarios...
Price movement on no news presents these scenarios...On all accounts last Friday was a capitulation with huge volume(8 MM shares) and a crash to $1.05 before coming back to close at $1.31. In three days it is a drop of 54% and in one day down 30% from the high of $2.28 to intraday low of 1.05.
We will use TA and try to determine what come next after a correction (more than 25%) In the near term. First get the big picture, we see the main run started around Last September at $0.495 to the recent top at $2.28. The Fib levels of retracements are 1.59, 1.38, 1.17. So it make sense to argue that we see the bottom already on Friday, with 1.05 < 1.17 on the extreme pullback. Also we see a technical rebound the same day to 1.42 from 1.05 (almost 40% rise from the low). The question is “will the recovery continue?” The answer relies on the fact that there is a ver, very small chance of retesting the 1.05 for double bottom in a short duration like the next two days. Instead the stock will trade to rebalance to the mean. So we try to find where the range of the rise and the dip will be. We know that the latest breakout is from $0.7 on November 10. Use that we find the Fib levels of retracement are 1.68, 1.48, 1.30, and these sp are within 1cent from the closing price on Jan 31, Feb 1, Feb 2. Amazing isn’t it. I am assuming we will see lower high and lower low movements which is typical when the weakness of the stock prevails until there are signs of a change of trend. With this in mind, we will use the next top from $2.28 which is $2 on Jan 24 and so the Fib levels of rise are 1.42, 1.53, 1.64. However 1.42 has been reached on Friday on rebound. So we have the following scenarios in coming days:
1. If we can move above 1.42 the next level is 1.53, then 1.64.
2. If sp closes below any of these levels that level will become the lower high.
3. Usually after 3 days of trading, meaning by next Wednesday we can have a better picture of using the mid band of BB as the mean of the price movement.
A seasoned trader can make use of the technique described above to trade in and out for some easy money. Of course there is risk and NEWS will trump any Technical Analysis and next week there could be plenty.
All are welcome to pm me for your take on TA. Good luck all.