Sunday, May 29, 2011

some charts

I'm only posting these to see if my charting is good enough to make predictions for the next week or two. Let's see if I'm mister fantastic chartie predictor! I've been at it for a whole year! How good will my predictions be?

RIO went parabolic for a couple days this week. Punched thru some resistance, bounced off an all-time high. I'd get worried if it dropped back below $2.50, or even fell below the former ascending resistance trendline thingie that I pulled out my ass and put on the chart there.

Of course it could just move along horizontally til it gets back into the ascending channel. The lack of volume Friday was fine, since it's memorial day weekend and I'd also assume Peruvians wouldn't be in the mood for buying until they got their last poll results (which, um, don't look good for Peru stocks come Monday - we might see a fast decline, and worse, we Canadians will be expecting the Peruvians to hand us a fast decline).

So expect the possibility that RIO collapses Monday. If you don't see a stampede for the exits on BVL open, things immediately look better.

Conversely: look at the late December price action, versus this week's. Back then, there was an mid-December topping/petering-out, but it was followed by a very fast 50% pop as the organized crime syndicates (i.e. investment funds) padded their portfolios with RIO. This month, we had another petering-out, followed by a skyrocket again. Perhaps the institutions are padding their portfolios with RIO yet again?

When you look at that formation, it might mean not just a skyrocketing to $2.70, but maybe a 50% move off the base of 2.25 - that'd target $3.38, and Otto'd get most of his target price in the space of a month or two.

So, who the hell knows?

RIO's also finally begun outperforming EPU, the Peru ETF. Hopefully this disconnect continues. I'd get worried if RIO all of a sudden crashed back to following the EPU. That'd mean a collapse to $2.20 or worse. No way am I giving back all that money I've made! I'd dump if I saw RIO begin to underperform - which it would do with a vengeance I expect.

Hm. reading all that, really, my best-case is a quick flash to $3.35 and I'm out on a near double in a few months, my mild-mannered case is RIO skims along $2.70 forever, and my worst-case is a 20% dump or more. Frankly, without a convincing breakout above $2.70, there's no reason to hold this thing at this very moment.

I'd like to see BTO challenge $3.50 again. Push the top of that triangle up. I've highlighted that hump in March, because the downside scenario might be that BTO draws something similar, back to the bottom of the triangle anyway, or at least a flop back down to the SMA(50). Now, if that happens, can we get another March-to-April type rise afterwards? Could we get that amount of oomph from their pending drill results, do you think?

Hm. No real chartie reason to hold BTO, either, unless it can hold ground and then bust thru $3.50. If it goes weak I might be able to buy it back at $3. We'll see.

SWD up to Wednesday actually looks like crap warmed over, then cooled down and solidified into a muck that takes hours to scrape from the pavement. But the downward channel, caused by insider selling, has been broken to the upside as of end of this week. The bottom, $1.20 or so, is also where it was 5 months ago, which is nice, that'd probably be the absolute bottom which is just a few percent below my buy-in price.

Actually, if I were a bottom-feeder, or even prescient enough to actually look at the damn chart before buying a stock!, then I'd still never have touched this stinker.

Is $1.60 resistance, or can we see $2.10 again? Then again, it's been rising on no volume. Then again again, if we can see December 2010 volume again (500k shares per day), this thing could take off pretty quick. Would the expected impressive Titiribi results create that much volume?

I think if I see it drop below $1.45, or worse drop back below that very frickin' sharply descending channel line, I'll consider dumping what I have. But thankfully, the L2 for the past few days has shown that some people are indeed in a rush to buy; they just aren't desperate enough to hit the asks, generally. Yet.


Frankly, out of the 3 charts, SWD's the one that holds the most promise for a short-terming momo pennyflipper like me. I could see BTO going back to $3 easily, and RIO falling hard if the volume collapses - at worst, drifting along the ceiling. I doubt we fly up to mid-$3 on RIO, but I won't be surprised now either after seeing that December structure hinting at a repeat in the chart.

Though I guess BTO has less risk than RIO (if your fear is baby-eating Bolivaran Communists). And SWD looks like it could easily give me a 60% return in the space of a month. Sometimes you have to buy a shitty chart to smack a home run, and this one both looks shitty and has the fundie potential for a home run.

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