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It is quite clear on the OBV that Healthway Medical has experienced three continuous days of distribution. Volume today was the highest of the last three sessions as price closed at 16c, an important support level identified earlier.
On 14 Oct, I mentioned that "16c is likely to be psychologically important as a support. So, if it could hold up, it could provide the base for a rebound" and "if the support at 16c breaks, the uptrend is well and truly over. We could witness a massive selling down to 14c then (the 138.2% Fibo line), followed by 13c (the 161.8% Fibo line). So, all eyes would be on 16c."
With the lower highs on the MFI and RSI suggesting weakening demand and buying momentum, it is likely that we would see price weakening further. The chances of a rebound look poor especially when the weakening share price is accompanied by higher volume. The negative divergence between the uptrend in price and the downtrend in the MACD has yet to play out in full.
Keep an eye on 16c and if it breaks on high volume, we could see 14c tested as support sooner than later. Any rebound in price from the current level is likely to be met with strong resistance at 17c, formerly a strong support and it is also where the merged 20d and 50d MAs are declining to.
Related post:
Healthway Medical: Uptrend threatened.
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