April Commentary

Our April commentary will bear on a security we have discussed a few months ago. As most of you know, I like to look back at previous trades to see if there is a new opportunity developping. ASTM gapped up a while ago and has been slowly closing the gap since. What we need to establish is whether there is a reversal in view and how can we stage our trade. The analysis has been recorded in a Flash presentation. The file is rather big but it provides audio comments as well as charts. If your browser blocks popup, you need to allow them to view the Flash. The Flash will play below the chart.                                                

Analyzing ASTM

For those who prefer a text, I will summarize our analysis. The first thing to do is to look at the Fibonacci retracements of the largest waves (34%); although we work with 21% retracement, we want to see the broader picture. As it turns out, price is sitting at exactly 61.8% retracement of the 3 waves uptrend. Then using a Fibonacci fan, we look at the fit with the 3 waves upmove and then at the downward move. The study provides us with some criterias to enter a long trade only when certain conditions are present such as a price move above $3. However the trade is very risky as the bearish trend is not fully completed, we could have a 4th and a 5th wave (we are now in a wave three extension).

If you liked the Flash presentation, please tell me and if not, tell me what you did not like.