You may well be right specking. I am just pointing out that last time momentum measures reached these levels we saw a decent rally in the share price. As you say it may well have coincided with fundamental news at the time.
Technicals have a strange way of becoming self-fulfilling though in that other investors / traders are looking for similar "signals" in the market and will place orders accordingly. This creates a build up of positioning skews which can also be exploited if they can be identified (ie) I think when Max99 gave the 10 cent bid the other day it probably precipitated this downside move to some degree as that 10 cent level had previously provided big technical support (build up of positions there and also a CR level in the past). The moment it broke we have seen a pick up in volume and consistent selling since which suggests quite a few people were long the stock off that level and are stopping out. If it holds in here and reverses higher then that will be a failed break and will provide quite a bullish short term tech picture. If not then as you say it will probably test into the early 9's quite easily.
So I do of course agree that this will be ultimately driven by fundamental news but technical are a good way to identify these "stress" points in the market.
IMO of course. and I am long at higher levels than this so it is not like I am the guru on picking the exact entry and exit points here !
EWC Price at posting:
38.5¢ Sentiment: None Disclosure: Not Held
STX Price at posting:
9.7¢ Sentiment: Buy Disclosure: Held
(20min delay)
