I prefer to put my analysis up in XMD if I’m looking at charts. I thought I’d have a look at your CLQ as an exercise, mainly because it’s a smaller company and difficult chart to analyse so thought I'd give it a go. I can give you some opinions on the chart but it’s not a high level of certainty, just a bit of judgement as not many TA tools work well on a chart and smaller stock like this.
However if I was in this I’d be looking to sell the end of this week or maybe at levels noted below and then possibly re-enter at lower levels if you like it long term. But you could take it day to day to see how it reacts, as this week should still close reasonably well and a pullback might get reasonable support just below here anyway. To explain:
Monthly Chart:
Uncertain Elliot Wave, but it looks like the Wave C is complete and it’s in a new uptrend. That’s the basis that you could hold longer term or sell out of the spike and repurchase lower. Check fundamentals to consider if that makes sense or it’s just a HC pump. however five waves up suggests this is the last leg short term.
The ATH 50% level at $0.36 is an important level and gives away some clues.
Target 1: ATH 75% @ $0.54. Notice on way down in March 2009 that SP fell through the ATH50% level to the ATH25% level over two bars (monthly) and then retraced to ATH50%, before falling away again longer term. This could occur in reverse. i.e. It spikes up this month and next month to ATH75% and then falls back to ATH50%, before continuing up longer term. That sets an upper limit for this spike. I’m not sure it’s the most likely, but its set an upper limit for you to consider short term risk/reward of holding this spike.
Target 2: ATH61.8% @ $0.45: This is more likely. Ignoring ATH50% for this, just looking at the big picture it fell over 4 years, then spent 5 years rebounding to ATH61.8%. I’d pick this as the most likely point that it pauses and it’s close.
Target 3 ATH50% @$0.36. This is the strongest level. The fact it punched through here shows the stock is strong. On a bigger, more liquid stock you could be pretty confident this level would hold on a retrace. The FA reasons for the drive up might help judge whether it is sustainable at these levels or again there is some HC pump factor at work here and not much company substance behind it.
Weekly Chart:
Can’t get a trend line on this on my rules. Not much worthwhile TA.
Main point here is that it has been 10weeks up. That’s about the limit of counter-trends for example, although this is a new trend rather than a CT. You can see back in March 2012 that it rose 490% over 9 bars. This spike is 280% over 10 bars. So timing wise it’s pretty close to a top, although range is ok.
Conclusion:
It’s a volatile chart, but I reckon you’re in a longer term uptrend if that makes sense FA-wise and you need to decide whether to hold through the big swings or not.
I think ATH50% will now become support and hold. That means it will retrace to that level and can drop through it but should oscillate thereabouts on a retrace.
The question is does it spike to ATH75% and retrace to ATH50%. Or does stop at ATH61.8% and retrace to ATH50%. I’m leaning to the latter.
Downside risk is probably that ATH50%, but worse case is it keeps going down to ATH38.2% where good support is.
That a lot of waffle, but it’s really just setting some parameters to track this against. You’re probably safe just to see how this week plays out and maybe if it finishes strong then hold it another week or if closes low then bail.
One last thought is that this is a retail stock with a lot of longer term investors currently in profit. You might find that retailers hold until 30June to sell into new tax year (i.e. opposite of tax loss selling pre June). Watch for that effect if sellers seem to dry up.
If I had to guess its path I’d still say we’ll get a monthly reversal bar in June. So it opens higher than current but closes low (June starts this week). I put in brown dashes on the monthly chart some potential scenario’s.
(20min delay)
