Forum Archive Index - December 2001

["nick" <helmett@xtra.co.nz>]

        Has to be said, its a very weak looking flag, even weaker on the 
preference
shares.  The flagpole has hardly been the result of a runup in price,  its just 
gone
up a few points after being oversold due to sept 11th.
      There was a similar looking flag in august/sept which proved to be far
from bullish.
     Technical indicators are all at sea using this stock, for example the 
stochastic
on ffs is around 30 having fallen from 80. However the preference shares
the stochastic is on 40 having just risen from zero!
       The price in the near term will be dominated by what happens regarding
the north island forests, and while charts may well be able to approximate
likely future prices based on past results, they are not going to be able to
tell us who will buy the forests or the amount they will pay.
        They do look cheap at present levels, especially  with all
the activity which is coming up. Before the deal is done there are sure
to be some juicy rumours pushing the price up and down. Would be suprising
if the price dosent go over at least .30 in the next month or two.

Nick

> (Requested by David) Viewed over about a year, FFS has been in a wide trading 
>range (23 - 34 cents). Within this range
it has been in a downtrend for the last four months. Short-term, a bullish flag 
has formed.
>  A bullish flag is defined as an upward move in an almost straight line (the 
>flagpole) followed by a short downward
sloping rectangle, bounded by two parallel trendlines. The pattern is confirmed 
by a breakout above its upper trendline,
which is thus the buy signal. This is a reliable pattern, with a failure rate 
of 13%, and an an average gain of 19%.
Flags are a short-term pattern  - formations longer than about 3 weeks have a 
higher failure rate.
>  When to buy? FFS is very near to a historical support level. While it is 
>unlikely that this level will be broken, any
close below 23 cents would have negative implications. The prudent thing, 
therefore, is to wait, and buy on any close
above the downward trendline. Very cautious investors should wait for a new 
uptrend before buying.
>         Phaedrus.
>
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