QuantitativeExhaustion

Jim Cramer Says FTR Screaming SELL SELL SELL! I beg to differ

Long
BATS:FTR   None
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12
Everything on this chart says its time to buy. Although the symmetrical triangle pattern does leave me with a bit of uncertainty. However, I am confident a bullish trend has just started.

As you can see recently the Heiken Ashi chart has given us a clue to a trend reversal. What I see is a series of long red candles and on Friday a red hammer within the long red candle. This is slightly bullish . To test my prediction of a trend change I look for regular Japanese candles to see if I can find a bullish candlestick pattern. What we see in the Japanese Candlesticks is a bullish cross. Bullish because of the last candle in a bearish trend . Bullish cross can also be referred as a rinkenshaw man, or long legged doji . After rinkenshaw man set-up, the next candle that followed was yet another bullish sign, a hammer .

Last I look to see if we have divergence. For the past 4 months MACD has been in a steady range as FTR has been hitting lower lows. Matter of fact we are near a double bottom in MACD while FTR stock price has descending bottoms. If MACD were breaching new lows while FTR stock was falling to new lows, technicians would assume FTR bearish trend to continue. What I can asses from the MACD is that FTR has capitulated. Recent higher volume on fresh lows after earnings also confirms a psychological sentiment of capitulation.

Last indicator is stochastics, which recently crossed over. Crossovers are a sign that a reverse is about to take way. You may also see an occasional flat stochastic crossover suggesting the stock is building a support shelf. Shelf's are seen as even more bullish . Notice we have divergence in stochastics to complement MACD bullish divergence .

My lower price target for FTR near term is 4.60. This is slightly below resistance of the prior trending triangle. If trend continues and the triangle resistance is breached, investors could expect a price target as high as 6.00 or more.


Jim Cramer prepare to eat crow.