Monthly Chart: Huge down trend, it broke straight through the ATH50% (the strongest of all levels) and went straight to ATH25%. This is unusual in one go and shows very weak. However, due the strong bounce and expect it to rise back to the light blue zone at $7.17 to $7.52. See notes in blue on chart.
Note short term it has bounced to the 25% of last major range and horizontal resistance so expect a pullback before continuing as above.
Weekly Chart: This looks like just a bounce from the lows. 7 bars straight up looks like a counter-trend. Hit 25% retrace of major range. Hit 50% retrace on point it fell form. Price up 20% this week alone, on falling volume. Needs a pull-back to put in a higher low. Is likely to pull back from here.
Conclusion:
The stock has had a strong bounce only. It’s now hit short term resistance and should pull back over next week or three. Regardless, it's poor RR to buy here. Don’t chase it. It needs to put in a higher low on the weekly before it’s a buy to be confident the near term low is in.
If it puts in higher weekly low, then upside target is that monthly light blue zone. It won’t get through that though without a further pullback (couple of months to play out).
Longer term it’s not clear whether the long term low is in. It wouldn’t surprise me at all to drop below the ATH25% level over 18mths or so but I can’t state with confidence at this point. I want to see how it behaves after it’s tested and rejected that ATH50% level and come back towards the ATH25% again, to see if it puts in a higher low on the monthly. I’ve marked on the Monthly chart in a light brown dotted line a possible path for the stock and summarising the above comments. It’s hard to get three swings right, but that’s the sort of indicative path I’d be expecting at this point and then make a further decision later this year.
Key for trading it is to wait for a higher low on the weekly before considering a long trade up to the blue zone.
If this is one of your 7 year buy and holds, then technically No. It just hasn’t put in enough of a base to take that sort of a position. It's too volatile. It’s a trading stock for the moment.
The only long term bullish observation I can make is to note the big multi-year swings on the monthly. It goes on long multi-year trends. That presumably reflects big cycles in the underlying commodity and some study of the almond market may identify a long term cyclical recovery that overrides my comments above.
Fundamentals: I’ve linked a post from Herbalist in XSO on 3 Feb 2016 on the FA of this. It might be up your alley to research whether the almond commodity market is in recovery or not, which would help interpret this chart. http://hotcopper.com.au/posts/16936097/single
(20min delay)
