tradersmentality

VFF Bull Continuation Possible Soon

Long
TSX:VFF   VILLAGE FARMS INTERNATIONAL INC
VFF has pulled back in two legs sideways to down after a strong bull rally. The bulls have a 60% chance of a second bull leg up before there is a strong bear reversal. Last week broke below the 14 first leg down. This is where the bears need to be the strongest. This is also where strong bulls (and bears) will start looking to buy for trend continuation. However there is not yet a strong buy setup. If this week closes on its high, it could signal the end of the correction and soon enter a bull channel phase for a second leg up.

There are many bull gaps below, and the rally contained strong buying pressure. Furthermore, the sell off has not been all that strong. Last week was one of the strongest bear bars, and created a gap around 14. Since there are no previous open bear gaps, this one will likely be filled as well, and may act as an exhaustion gap. The bears need to keep the gap open and create strong follow through selling to increase their probability to 50% for a test of the bull breakout.

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