Reading ChartsFor a past few weeks we watched RHT eroding its price on little volume moving in lethargic fashion . Mostly lower. Momentum was gone and excitement was gone. I mentioned number of times we managed 4 lover highs going back to March highs of 2.62 to 1.81 last week. This week we added another lover high when market violently moved against us today.
So, let’s look at the chart trying to figure out what market is telling us and what we can expect next week.
On Daily Chart:
We broke longer term support trend line and moved lower ending today with the hammer. First of all hammer needs confirmation before we can even talk about potential reversal. I would prefer to have couple of dojis before the hammer and would be nicer if hammer had bullish body. We don’t have these thingis. So be careful. We were very oversold today so bounce back from the lows of 1.40 to 5 Days EMS is natural and traders called this reverse to the mean - you can see it much better on 60 minutes chart. I added broken line parallel to the resistance just as a possible support within possible channel. This is NOT a real channel as of yet. RSI is oversold just a bit but not too much and TSI momentum gone and curling lower. Support around 1.31 Fibonacci and potential channel same 1.31-1.29. Resistance around 1.69 EMAs/Kama. This chart is screaming: “ be very, very cautious”.
60 Minutes Chart
We bounced back to 5 Days EMA to recover from heavy loses. Some traders made 10% on the move. With $10k transaction they made $1000 – not too bad for a day in cubicle. We might have created a Bearish Flag what would be a pretty bad sign. Momentum negative but Stochastics are pointing up – but mind it, this is 60 minutes timeframe.
Weekly Chart:
Deterioration of price is pretty visible here. We are bellow 5/9 Days EMA and Kama – support would be Bollinger Bands around 1.25 and Fibonacci Retracements 1.36/1.06. Support on 20 Days EMA – 1.74 and 9 Days EMA – 1.84.
We might have some bounce back on Monday but this stock is damaged and will need some time to recover. Have no idea how some of you see price rapidly moving up from here. This is just wishful thinking. It might happen with proper catalyst, but it’s better be very, very good news.
I added extra lines for possible price movement in next few days. This is just Prognostication to make us aware of what’s coming. You don’t make decisions based on such an approach. In any case we should get higher low before placing any orders.
HighRider2 placed orders in 1.20’s – trying to catch falling stock at the very solid support line. I done such things before and sometimes they worked. Except when bad news popped up and stock went down by 40-50%.
No matter you call yourself an Investor or a Trader. Always have at least 2 scenarios. And never, ever go full retard (where is this coming from?).
Happy trading