Forum Archive Index - October 2001

[Phaedrus <Phaedrus@techemail.com>]

Heather,
         VTL broke through a confirmed downward trendline on 11/10/01, and is 
also now in an Uptrend. This stock is fairly lightly traded, and on occasion 
has a day without a single trade. This means that some aspects of technical 
analysis do not work as well as they normally do. Note the large number of days 
with a "Four Price Doji". This candlestick is quite rare in actively traded 
markets, when they would represent total uncertainty among buyers and sellers 
as to market direction. Here they merely mark days with a very small number of 
trades.
 Take a look at the volume bars along the bottom of the chart. Note the volume 
climax - these often mark major turning points. The volume bars are coloured 
blue on up days, red on down days and grey on days with no price change. See 
how, without exception, all the highest bars are blue. This is evidence of 
buying pressure. Note how during the two month long downtrend there were no 
tall red bars. This shows an absence of heavy selling pressure. There was no 
panic selling. Prices just drifted down. 
  I have labelled a few of the candlesticks for you. Doji occur when the Open 
and Close prices are the same. White Marubozu occur when the day Opens at the 
Low and Closes at the High of the day. As you would expect they are bullish - 
buyers totally dominated the day. Dragonfly Doji are considered bullish, but it 
is not wise to interpret candlesticks too rigidly in thinly traded stocks like 
this.
 All this adds up to a fairly positive picture. It would not be unreasonable to 
expect some resistance at around $3.20 and $3.70.
       Regards,
                  Phaedrus.

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