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Healthway Medical managed to close unchanged from the previous session at 15c after opening at 14.5c. Is this a sign of real strength or is it an illusion? Thin trading volume with a rising MFI suggests that the weaker holders are being shaken out. Healthway Medical may very well test the 38.2% Fibo support identified earlier and that is at 14c. The fact that this coincides with the rising 50dMA lend credence to the claim that 14c is likely to be a strong support. Worst case scenario is a retreat to the 100dMA at 13c which is also a many times tested candlestick resistance level and is, therefore, likely to be an even stronger support level.
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2 comments:
Hi!
U are quite bearish abt this stock. From where did you think that the HW wld test the 14c level at 38.2% Fibo support?
Hi Zac,
Bearish? No, I am bullish! I see limited downside. If you refer to my earlier posts, you will see that I think this stock will u-turn and test resistance at 16.5c, 18.5c and maybe even 21.5c (the XR eventual target). When? I don't know.
The low volume pullback happening now is a classic textbook example. Buy during low volume pullbacks close to the supports as the selling conviction is weak.
As for testing the 14c support, I say it may very well test the 14c support, not would. We can never be 100% sure in TA. It's always a matter of probability.
Why did I say it may very well test the 14c support? When volume is diminishing and the buying momentum is weak, chances are higher that prices will continue drifting downwards. This is exactly what we have been seeing for almost 2 weeks now.
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