Tea with AK71: A short fairy tale!

I would like to share this fairy tale (which could be a reality for some of us):

Thanks to a cboxer, Patty, for sharing this with me.

I hope you enjoyed it as much as I did. ;-p

ARA: Partial divestment at $1.18.

On 7 October, I said in a blog post that the 61.8% Fibo line "approximates $1.18 and this is also where gap close could take place if the resistance at $1.16 could be taken out convincingly". My overnight sell order at $1.18 was filled.

Closing at $1.205 is exactly where we find the declining 20dMA today. This also coincides with the declining trendline connecting the tops of 1, 9 and 21 Sep. So, it explains why it was such a strong resistance.

With the MACD forming a bullish crossover with the signal line in negative territory, we could see a continuation of this rebound. A necessary condition would be higher volume if price should attempt to push higher. Notice how volume has reduced as price inched higher in recent sessions. This is most probably unsustainable.

Overcoming resistance at $1.205 in the next session convincingly could see buyers piling back into the stock which could then see gap closing at $1.26 and perhaps even at $1.305. The latter is still possible since the declining 50dMA approximates $1.32 and provides some breathing room.

Related post:
ARA: Partial divestment at $1.155.