Take a look at the stock price.
- Back in Feb 2012, we see an 8 day rally, ending with a "bearish engulfing" pattern (first box). Overall, this is anything but , as we see a continuation of the , all the way to April 2013 .
- The starting price of the box was around $450, finishing at around $510.
Now fast forward to Aug 2013 .
- We are in a uptrend, similar to that of first quarter 2012.
- We are in a similar 6 day rally, with a pattern (right box). And yes, the resemblance (to 2012) is striking. The volumes are similar. Even the resistance and support levels are similar (Rejected around 514 both times)
- Take a look at the . See the similarity?
If history were to teach us of anything, I think we are still in the middle of the . I graphed the in 2012, and it was cloned and superimposed to the the current run. So far, we are in the middle of the channel. There is no reason to be here. I think we have much more run to run. Let's run with it!
Things to watch for...
- Note that the pattern in the first box (2012) was a single red , and did not trigger a downtrend, and certainly did not break down the support of the channel or . By EOD tomorrow, we will find out whether this is true or not for the current run. If today's sell off was an isolated event (like in the first box), then it would further confirm my thesis.
- Also note the downtrending dotted purple line here. Looking at the big picture, it is a another level of major resistance. It happens to intersect the Sept 10 product release date, right in the middle of the channel. Interesting to see what will happen.
First thing first. Tomorrow is the key here, let's watch it closely.
We shall see what happens today. A gap down is not necessarily a bearish sign. However, I would like to see that we finish the day green.