Forum Archive Index - February 2002

[Phaedrus <Phaedrus@techemail.com>]

Keith,
      The good news :- IBA is in an uptrend, having decisivly broken out of a 
long consolidation zone. It closed yesterday at its high of the day, up from 
the close of the day before, and well above the trendline - bullish signs.
 The bad news :- Note the large gap up. This could well be an exhaustion gap, 
and in any event, gaps like this are often filled. Note the very long upper 
shadow of the candle after the gap. Prices opened high, and shot much higher, 
before heavy selling pressure forced prices back to the open, and then even 
further down, closing not much above the low of the day. Note also the volume 
spike - this is a price/volume climax, typical of those found at major turning 
points. Remember that it takes volume to stop a trend. Very, very bearish. I 
would not like to be the poor misguided sod that bought at 36! The following 
day was a black Marubozu - the open was the high of the day, and it closed at 
the low of the day. Again, bearish.
 So, should your friend buy? At this point, I would be selling, taking the 50% 
in three weeks profit. Those greedier than me would be holding on in the hope 
of gaining even more. A buy at 30 would have to be classed as a high-risk 
speculative gamble, rather than an investment.
          Regards,
                    Phaedrus. 

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