Healthway Medical: Support at 15c broke.

The counter closed at 14.5c today. Remember I mentioned that support is at 15c. Well, that broke today but it did not look to me like a convincing flush downwards as the volume sold down at 14.5c was very light and in fact, it was a one lot sell down at closing which caused the counter to close at 14.5c today.

I am wary of being whipsawed out. With the MACD hugging the signal line, this counter could go either way. However, with a picture of low volume pull back intact, comparing the high volume sell downs in mid October, when support at 16c was broken, to the current thin trading volume, the suggestion is that most of the weaker holders have been shaken out.  This does not mean that the price could not go lower.

I like to look at the weekly chart for more clues when the near term charts get a bit hazy. The picture of low volume pull back is reinforced in the weekly chart. Believe it or not, the counter's longer term uptrend is still intact. The MFI and RSI have both formed higher lows recently. These form positive divergences with the decline in the counter's share price. The MACD is still plunging into negative territory, however, and we could see price weakening further.

13.5c is a strong support, tested first in February, being underpinned by a rising 20wMA then. It was tested again in May, being underpinned by a rising 50wMA then. This time round, 13.5c could be tested once more as support and it would be underpinned by a rising 100wMA. So, we could see 14c tested soon if this pattern plays out.