RichKid
PlanYourTrade > TradeYourPlan
- Joined
- 18 June 2004
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Re: Speccie - First Australian Resources (FAR)
Hi Doc,
Good question, the idiot is me for using the shorthand measure that sometimes comes with traditional TA. The estimate is from the height of that long descending wedge/descending triangle? combined with the base built over several years. The marked increase in volume is what makes me think it may be explosive, especially as it approaches that longterm downtrend resistance. I'm more inclined to see this as a bullish wedge (I couldn't draw the lower downward sloping trendline but that would show the wedge clearly, curren bottom line is horizontal support at all time low- it helps define th base).
Odds don't favour it overwhelmingly but it is, as with most things in TA, a possibility which has to be considered. Also $1 is that magic psychological figure, the measurement of the height would see it exceed $1 but that's high enough, if it makes it. Plenty of ASX resources jnrs have done similar things (on different chart patterns eg OEX) so don't be surprised.
But to get back to the question, that measure is not the most reliable, prices can wander around. If we consider it a descending triangle then an upside breakout could be expected to be weak or non-existent. I think it's the recent volume that really invalidates that pattern as it is the opposite of the theory which requires declinging volume as you approach the apex.
Hope this helps, I'm not that good at measuring and need to do more research into it. I like the increasing volume and the basing pattern but hard to trade as a one cent move can mean being stopped out for most. I'll be trading this on the dailies whenever possible. Currently hold, hence the chart work.
PS I just noticed the first half of the chart appears to have bars and the second bit seems to be candles, not sure why. Also story for co in early years maybe completely different to fundamentals for recent years but a chart is a chart and we look at price action not value or fundamentals.
doctorj said:
Hi Doc,
Good question, the idiot is me for using the shorthand measure that sometimes comes with traditional TA. The estimate is from the height of that long descending wedge/descending triangle? combined with the base built over several years. The marked increase in volume is what makes me think it may be explosive, especially as it approaches that longterm downtrend resistance. I'm more inclined to see this as a bullish wedge (I couldn't draw the lower downward sloping trendline but that would show the wedge clearly, curren bottom line is horizontal support at all time low- it helps define th base).
Odds don't favour it overwhelmingly but it is, as with most things in TA, a possibility which has to be considered. Also $1 is that magic psychological figure, the measurement of the height would see it exceed $1 but that's high enough, if it makes it. Plenty of ASX resources jnrs have done similar things (on different chart patterns eg OEX) so don't be surprised.
But to get back to the question, that measure is not the most reliable, prices can wander around. If we consider it a descending triangle then an upside breakout could be expected to be weak or non-existent. I think it's the recent volume that really invalidates that pattern as it is the opposite of the theory which requires declinging volume as you approach the apex.
Hope this helps, I'm not that good at measuring and need to do more research into it. I like the increasing volume and the basing pattern but hard to trade as a one cent move can mean being stopped out for most. I'll be trading this on the dailies whenever possible. Currently hold, hence the chart work.
PS I just noticed the first half of the chart appears to have bars and the second bit seems to be candles, not sure why. Also story for co in early years maybe completely different to fundamentals for recent years but a chart is a chart and we look at price action not value or fundamentals.