Let me begin by recapping the charting landscape beginning in late Sept 07 and extending up to Dec 17 (day prior to settlement news).
During this date range, PTSC’s sp experienced 2 very distinct, very powerful consolidation patterns, with an approximate time frame of 1 month each. A third such consolidation pattern was well on it’s way to formation when interrupted, as we all know, with the settlement news on Dec 18.
Each of the first two consolidation patterns established well defined S/R lines while the third pattern, experiencing only 1 trading cycle, was unable to form any significant support. Even limited in it’s formation, the third pattern did reveal what appeared to be the approximate .10 trading range as the 2 previous patterns.
1st Consolidation Pattern - Ascending Triangle - S/R ~ .37-.49
2nd Consolidation Pattern - Symmetrical Triangle - S/R ~ .54-.63
3rd Consolidation Pattern - Unknown Pattern - S/R ~ .65-.76
Note: breakout price bars are not being considered in this S/R determination.
Ideally, when establishing S/R lines in an uptrend, the sp would need to consolidate in ranges where previous resistance becomes new support. IMO, this did not occur between the 1st and 2nd CP ranges. Note the approximate .05 spread.. However, the S/R between the 2nd and 3rd pattern is only a couple of cents and is closer to the ideal S/R model. While this may not at first glance be significant, a closer look at the overall trend may reveal where sp may begin new consolidation.
As we examine the retracement subsequent of the shooting star (Dec 18), we see that the previous resistance of .63 has now become support. Very typical retracement up to this point due to sp severely breaching the upper Bollinger during the breakout of the 2nd CP and on the spike to .94 two days prior. This retracement also closely aligns with the Oct lows of the overall support line in the uptrend.
With only one small trading cycle back to .70, the sp again tested support at .64 but finally gave way with lack of momentum. Teetering on the balance, the sp needed numbers to tip the scales back to an uptrend. Breaking support at .63, the sp once again landed at the next support level .54.
Now here is where it gets interesting. The sp experienced a very small bounce at .54 and tested resistance at .59-.60 which aligns with the mid-line axis of the 2nd consolidation pattern’s trading range. (Also, this new resistance aligns with previous resistance back in June-July.) With very little support, sp sinks on the fast track and finds support at .44 which just happens to be very near the mid-line axis of the 1st consolidation pattern’s trading range. Currently, the sp sits atop the 1st consolidation pattern’s resistance line of .49 but is also on the ‘slippery slope’ of the lower Bollinger where sp is known to slow bleed.
So what are you trying to say PxP???.... "Hell, I don’t know!!!"."Who is Jack???" (just kidding)
We sit at another critical juncture. With a little news, IMO, I believe the sp will have a great chance to begin a new consolidation pattern between the two previous CP’s. I believe the mid-line axis of both the 1st and 2nd consolidation patterns may very well become S/R. The mid-line axis of the new CP range should form somewhere around the center of the .05 spread that is void of defined S/R...simply stated .43-.59 Working out of the oversold position on stochastics, sp should get some semblance of a bounce unless, of course, the sp trades in an extended oversold position. How much of a bounce??? All depends on some news, imo.
Keep in mind, that there is plenty of time between now and April for consolidation patterns to form. Also, this is strictly based on the previous patterns mentioned above. Fundamentals have only gotten stronger, imvho. Price will seek current perceived valuation. Price will be determined by what is known and not by what is speculated to be known...All IMO.
I would blather on but it’s late and I must go home.
GLTA
Regards,
PxP
