3SOF

SVA, technically, looks to be shaping up for a nice rally of as much as 60%+ if it can break out of the "possible" Bullish Inverse Head & Shoulders pattern that has been forming since mid-December, and get to the target that would be IN PLAY.

Applause to Thai626 for his fine work on the recent Bullish Wolfe Wave, including catching the bad tick on the big black candlestick in early March. 

The Wolfe Wave target MADE on March 21 at about 4.78, for a gain of 33% if we had bought the 3.60 successful re-test of the bottom of the Wolfe Wave pattern (I didn't, dang it).  The target was exceeded, on the rally to 5.28.

Achieving the Bullish Wolfe Wave target is noteworthy since it "suggests" that the wicked decline of 59% from the November, 2005 high to the early March, 2006 low "could be" over, and that the stock has "turned the corner" by doing something bullish (achieving, and exceeding, a bullish Wolfe Wave target).

In this post, we'll look at the Ichimoku Kinko Hyo chart (below), which is Japanese having to do with the "table of equiliibrium" which helps us to see "at a glance" whether the stock is trading above or below the Kumo (Cloud).

The Kumo (Cloud) is formed by the vertical lines.  We can see "at a glance" that on the way down to the bottom of Thai's Wolfe Wave, SVA was trading below the Kumo (Cloud), which tells us that we aren't favored in long postions. 

At some point, of course, the stock will bottom, as SVA did at Wave 5 of the Wolfe Wave, but unless we're good at catching bottoms, it's better "in general" not to fight the trend by taking long positions in a stock that is trading below the Kumo (Cloud).  We could end up "knife-catching" repeatedly as the stock continues to make successive lows, if its in a relentless bear market.

If the stock is acting bearish and tries to rally back to the bottom of the Kumo (Cloud), that often is a very nice short, or an opportunity to sell if we haven't,  as it was at Waves 2 and 4 of Thai's Wolfe Wave. 

We can "see at a glance" that SVA got smacked on those two rally attempts toward the bottom of the Kumo (Cloud), at Wave 2, and again at Wave 4.

"Sell, or sell short, at known resistance."

After the rally to Thai's Wolfe Wave (#6) target, and beyond that to 5.28, we can "see at a glance" that SVA also mananged to rally through the Kumo (Cloud) resistance for the first time since it broke below it, in early December, 2005.

That "suggests" a change in trend from bearish to bullish.  The Kumo (Cloud) now "should" act as support if the trend, in fact, has changed to bullish.

After the March 22 top at 5.28, I (stupidly) placed an order to buy SVA at 4.25.  The Kijun-Sen (thick red line) was at 4.26 that day, and has remained at 4.26 since.  You'll see why I say "stupidly" in a minute.



Think of the Kijun-Sen  (solid red line) as a 22DMA of the price of the stock.  The Tenkan-Sen (solid green line) is similar to an 8DMA of the stock.

On pullbacks to the Kumo (Cloud) any of these levels "can be" support:

1. The top of the Kumo (Cloud)
2. The Tenkan-Sen (8DMA)
3. The Kijun-Sen (22DMA)
2. The Bottom of the Kumo (Cloud)

Back to "stupidly."  I went for the Kijun, which was at 4.26,  with my good till cancelled buy order, only I placed my order at 4.25 figuring "what the heck," it seemed like a "round number," even though it isn't "round" at all.  It's a "quarter of a point," though, if you see what I mean.

Wednesday, the low was 4.25 exactly.  I didn't get filled. 

Early Thursday morning, the low was 4.25 exactly again.  This time they gave me some, but only gave me 18% of my order.  I was stubborn, and didn't change my order.  I got punished for it, and rightly so. 

   

Friday, the low in SVA was 4.27, a penny above the Kijun-Sen, and two pennies above my buy order.  Those guys like to be Jokesters, and I hate playing their silly games, but I also shouldn't have been stubborn.

   

Sorry for the boring story...all by way of saying that it looks like the Kijun-Sen at 4.26 is good support here, for what appears to be a "possible" right shoulder of a Bullish Inverse Head & Shoulders pattern, which we'll look at in the next post.

Before we do that, if 4.25-4.26 support fails, next Ichimoku Kinko Hyo support would be the bottom of the Kumo (Cloud), currently at 3.8575.   That's my stop.

SVA Hightlights since the January 13 rally failure at the declining 50DMA

1. The December, 2005 low was 3.91.  In early February, 2006, SVA tried to double-bottom, with a print of 3.95.  It rallied only to 4.48, then the double bottom at 3.91-3.95 failied, putting a target of 3.65 IN PLAY.

2. After the double bottom broke, SVA rallied back to the 4.48 high.  It got only to 4.47, but looked like it was forming an Ascending Triangle (solid black pattern).  That failed on February 28, putting a target of 3.20 IN PLAY.

The 3.65 target MADE on February 28, on the Ascending Triangle breakdown.

3. March 2 was the low of Thai's Wolfe Wave.  The low was 3.24, within four cents of the Ascending Triangle target.   Sometimes targetS come within a hair like that.  If WE come close to the target and see the stock start to head in the other direction, it's a good idea to cash out. 

"Don't step over dollars to pick up dimes."

In other words, we don't want to hang on trying to wring every last penny out of a trade.  "Close enough...take the money!"

4. The rally beyond Thai's Wolfe Wave target, to a high of 5.28, sets up the neckline for a "possible" bullish Inverse Head & Shoulders pattern, and the current selloff from that high is a "possible" right shoulder of that formation.

If so, a breakout above the 5.25-5.28 neckline would put a target a 7.28 IN PLAY.  If it is achieved, that would be a gain of 63.6% from Friday's 4.45 close.

that's quite an impressive and detailed analysis...applauds to you! 

tell me something...I see you use metastock charts for your analysis...but what's with all those japanese vernacular when it comes to you TA...did you learn that from the book "Japanese Candlestick patterns" or something like that? after all, the Japanese were the inventors of the candlestick analysis, right?

I appreciate your input...and I will try and get into HEB on monday depending on whether it's closer to breaking $4.25 or not.

MelfElf...

Here's my version of TA on this stock...and it's pretty simple and straighforward 

I think the reason you saw all that support at the $4.20 range is because the 20, 50 and 200 MA are all stacked right in that range!!!

check the chart out...on the 20th, 21st and 22nd, we saw some pretty high volume, and I attribute that to the break above the 50 and 200 MA's (there were no news releasdes on any of those days).

Looking at the other indicators does not give me too much confidence though...the MACD is trending back down...and hopefully we see it rise back up before even going into negative territory.

The RSI is flat, but the stochastics are falling...and it's better to wait for those indicators to turn up before buying in.

Of course, the only bright side that I see is the solid support in the $4.15 - 4.26 level the very important moving averages.

It'd also be nice to see the 50 MA crossing over the 200 MA sooner then later.

your thoughts on the above??

updated IR file:
http://groups.yahoo.com/group/Sinovac_Biotech_IR/files/5%29%20News/20060331_News\
%20of%20Interest%20to%20Sinovac%20Biotech%20Ltd.pdf

or check my attachment 


cheers
O.

Quote from: vic666 on April 01, 2006, 12:25:19 PM
tell me something...I see you use metastock charts for your analysis...but what's with all those japanese vernacular when it comes to you TA...did you learn that from the book "Japanese Candlestick patterns" or something like that? after all, the Japanese were the inventors of the candlestick analysis, right?

Vic,

Thanks.  The Ichimoku Kinko Hyo indicator is just one of many provided by Metastock.  Here's their description of it:

"The Ichimoku Kinko Hyo was developed by Goichi Hosoda, a Japanese newspaper writer, writing under the pen name "Ichimoku Sanjin."  He developed this charting technique before World War II, and offered it to the public when he published his book in 1969. 

Ichimoku translates as "a glance" or "one look."  Kinko Hyo translates as "the table of equilibrium" or "balance table."  Hence a chart displaying this indicator provides a broad look at the prices in a single view.  You should be able to look at the chart and know at a glance whether to buy or sell."

Quote from: vic666 on April 01, 2006, 02:03:25 PM
Here's my version of TA on this stock...and it's pretty simple and straighforward

your thoughts on the above??

I think you did a good job.  Applause.

Yes, if SVA can rally soon, the 50DMA will cross back above the 200DMA, and the MACD will kick higher, from near its signal line.

Relative Strength looks particularly good here.  I like to look at RS using several Fibonnaci numbers.  They're coming into sychronicity, so to speak, in sequential progression, and then they're kicking higher.  So far, so good.

Below is an example of that.  It's the 13 and 21 Day measures of Relative Strength.

Quote from: la-onda on April 01, 2006, 03:04:06 PM
updated IR file:
http://groups.yahoo.com/group/Sinovac_Biotech_IR/files/5%29%20News/20060331_News\
%20of%20Interest%20to%20Sinovac%20Biotech%20Ltd.pdf


cheers
O.

Oliver,

Link doesn't work.   

It asks one to sign in. 

Quote from: Melf Elf on April 01, 2006, 04:22:20 PM

Relative Strength looks particularly good here.  I like to look at RS using several Fibonnaci numbers.  They're coming into sychronicity, so to speak, in sequential progression, and then they're kicking higher.  So far, so good.

Below is an example of that.  It's the 13 and 21 Day measures of Relative Strength.

Cool...I gotta learn to understand the significance of the TA analysis above you just made...I'm sure you'd agree there are a whole lot of ways to analyse a stock with diferrrent sets of indicators...I'm quite perplexed to know which ones to use...and when? I think different people have different answers to that question...

sometimes, I wonder if Technical Analysis on stocks is an art or pure science?? you know what I mean?

Anyways, thanks for all that explanation, you do an outstanding job in general to explain your side of TA on stocks. Keepi it up! 

Quote from: Melf Elf on April 01, 2006, 04:27:34 PM

Quote from: la-onda on April 01, 2006, 03:04:06 PM
updated IR file:
http://groups.yahoo.com/group/Sinovac_Biotech_IR/files/5%29%20News/20060331_News\
%20of%20Interest%20to%20Sinovac%20Biotech%20Ltd.pdf


cheers
O.

Oliver,

Link doesn't work.   

It asks one to sign in. 

please check my attachment
cheers
O.

Hey Oliver,

The attachment isn't in regards to the clinical tests done by Sinovac is it?  As far as I know, Sinovac has yet to release the preliminary results of their clinical trials started last November.  It kind of scared me when I read the first line of the attachment "H5N1 vaccine shows limited results".  Then I went on to read that it's the first experimental vaccine in the US............not China which is where Sinovac is doing their trial.

Quote from: Melf Elf on April 01, 2006, 08:41:06 AM
SVA, technically, looks to be shaping up for a nice rally of as much as 60%+ if it can break out of the "possible" Bullish Inverse Head & Shoulders pattern that has been forming since mid-December, and get to the target that would be IN PLAY.

Applause to Thai626 for his fine work on the recent Bullish Wolfe Wave, including catching the bad tick on the big black candlestick in early March. 

I hope so Melf    I hope it does it by next week so I can end up being top ten in the 3sof contest!    Thanks for giving me a shout out with the wolfewave chart.......I appreciate it.

Applause to you for all your great work and analysis!!!!!

P.S.  By the way Melf, my wolfewave target might just hit for BBI, check it out!  We'll have to wait till next week to find out.  But it sure does look like that will happen.

Thai

you are right thai 


H5N1 vaccine trial shows limited benefit

Robert Roos * News Editor

Mar 30, 2006 (CIDRAP News) – The first experimental US vaccine for H5N1 avian influenza yielded only modest results in its first clinical trial, generating an adequate immune response in slightly more than half of participants who received a heavy dose, scientists report.

Fifty-four percent of volunteers who received two doses totaling a dozen times the standard dose of seasonal flu vaccine had an immune response that was considered protective, according to the report in today's New England Journal of Medicine. Those who received smaller doses were less likely to show an adequate immune response.

On the positive side, the vaccine triggered almost no serious side effects, even at the highest doses. The results are in line with some preliminary findings reported last summer.

But the findings underscore the huge gap between existing vaccine production capacity and the likely need for vaccine in a pandemic. In an editorial accompanying the report, vaccine expert Dr. Gregory Poland of the Mayo Clinic writes that all the world's vaccine producers could make only enough of the vaccine for about 75 million people if the high dose that yielded best results in the study were used.

"We have a long way to go," commented Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), as quoted by the Associated Press. The NIAID funded the vaccine trial.

The trial was conducted last year at NIAID-supported centers at the University of Rochester in New York state, the University of Maryland School of Medicine in Baltimore, and Harbor–University of California–Los Angeles Medical Center in Los Angeles. John J. Treanor, MD, of the University of Rochester was the first author.

The vaccine is based on an H5N1 virus isolated from a Vietnamese patient in 2004. The hemagglutinin and neuraminidase genes from that virus were spliced together with genes from another flu virus strain commonly used in vaccines, the report says. In addition, the hemagglutinin gene was modified to make it harmless to birds so the virus could be grown in eggs. The vaccine was made by Sanofi Pasteur, but the company was not involved in the study.

The researchers recruited a total of 451 healthy adult volunteers. They were randomly assigned to receive a placebo or one of four doses of the vaccine: 7.5, 15, 45, or 90 micrograms (mcg). Each volunteer received two doses, the second one 28 days after the first.

The study was done in two stages, the first one involving 118 volunteers. After they received their two doses and monitoring showed no safety concerns, the other 333 volunteers were vaccinated in the second stage.

The researchers used a neutralizing antibody titer of 1:40 (signaling a fourfold or greater increase in antibody titer) as the criterion for an adequate immune response. Of the 99 volunteers who received the 90-mcg dose, 54% reached this level (95% confidence level, 43% to 64%). Smaller percentages of volunteers in the lower dose-groups had this level of immune response: 43% in the 45-mcg group, 22% in the 15-mcg group, and 9% in the 7.5-mcg group.

The volunteers reported few significant side effects, according to the report. They described 84% of symptoms as mild, and there were no serious allergic reactions. Systemic symptoms such as fever and headache were not significantly more common in the vaccine groups than the placebo group. One volunteer suffered a rash, which faded after a few weeks.

The results indicate that two 90-mcg doses of the vaccine "would probably have an acceptable tolerability profile and could be effective in preventing H5 influenza in healthy adult recipients," the authors write. "Elderly people, persons with impaired immunity, or children may have a different response, and trials of the vaccine in these populations are in progress.

"Production of the vaccine and this clinical trial are important steps toward control of a pandemic, and the current vaccine would probably be acceptable for licensure, if needed. However, the need for a vaccine with a total dose of 180 micrograms would pose a considerable barrier to rapid production of a supply that would be adequate to meet the world's requirements should a pandemic occur. Therefore, dose-sparing approaches should be pursued aggressively."

In the editorial, Poland says the results show that the immunogenicity of the vaccine is "poor to moderate at best." He adds that current annual global production capacity for flu vaccine is estimated at 900 million 15-mcg doses. This means that, at a dose level of 180 mcg, only 75 million people, or 1.25% of the world population, could be fully immunized with the H5N1 vaccine, and only about half of them would actually have protection.

In addition, Poland comments that the vaccine might not be effective against more recent strains of H5N1 virus. Researchers have identified an Indonesian clade, or subgroup, of H5N1 viruses that differs antigenically from the Vietnamese clade on which the vaccine is based. The US government recently announced plans to develop a vaccine based on the Indonesian strain of H5N1 virus, called clade 2.

Infectious disease expert Michael T. Osterholm, PhD, MPH, said the study was well-designed and yielded important information. "Unfortunately, that information supports our earlier concerns that both the antigen requirements and the immunogenicity of an H5N1 vaccine mean that if H5N1 becomes the next pandemic strain in the next several years, vaccine will play a limited or almost nonexistent role in such a pandemic worldwide," Osterholm told CIDRAP News.

As he has before, Osterholm called for a "Manhattan Project–like investment" to develop a flu vaccine that could be produced before the emergence of a pandemic train. He is director of the University of Minnesota Center for Infectious Disease Research and Policy, publisher of the CIDRAP Web site.

Poland comments in his editorial that the government has funded studies of more than 30 candidate vaccines for potential pandemic flu strains. These include vaccines with adjuvants (immune-boosting chemicals) to increase potency and live, attenuated vaccines, which could provide cross-protection against different viral subtypes.

The study authors write that other possible dose-sparing approaches under consideration include injecting vaccine just under the skin (intradermally) instead of into muscle and "prepriming" the immune system by including an H5 component in the annual flu vaccine.

Despite the limitations revealed by the study, flu vaccine expert Dr. William Schaffner of Vanderbilt University said the vaccine represents progress. "My impression is we are better off having stockpiled this vaccine than none," he told the Associated Press. He added that the vaccine should be viewed as "the first strong step in a long journey."

Treanor JJ, Campbell JD, Zangwill KM. Safety and immunogenicity of an inactivated subvirion influenza A (H5N1) vaccine. N Engl J Med 2006 Mar 30;354(13):1343-51 [Full text]

Poland GA. Vaccines against avian influenza—a race against time (editorial). N Engl J Med 2006 Mar 30;354(13):1411-13 [Full text]

http://www.cidrap.umn.edu/cidrap/content/influenza/panflu/news/mar3006vaccine.html

Quote from: vic666 on April 01, 2006, 05:58:34 PM
Cool...I gotta learn to understand the significance of the TA analysis above you just made...

Vic,

I began playing around with sequential fibonacci measures of relative strength because I didn't find overbought/oversold indicators to be particularly helpful.  When a stock is trending, those indictors can stay overbought or oversold for a long time.

I wondered if it would help to take "some" fibonacci measure of relative strength, and then "shadow" it with the next fibonacci number, sequentially.  So, I began to look at 13, 21, 34, 55, 89, 144 and 233 RSIs.  233 seemed far enough out.

Yesterday, I showed you a chart of the 13 RSI, "shadowed" by the 21 RSI.  As with, say, 50 and 200 day moving averages, the faster RSI (13) should be above the slower RSI (21) to be bullish.  The 34 RSI should be above its shadow, the 55 RSI, etc.

Here's a chart of SVA's 34RSI, shadowed by its 55RSI.   Some observations:

1.Early last summer, the 34RSI thrusted higher, above the 55 RSI when SVA doubled from about 1.65 to 3.24.

2. After the initial bullish thrust higher, notice that the 34/55 RSIs TWICE "came into synchronicity" (my own terminology, for lack of coming up with something better).  The 34RSI came back to  meet  the 55RSI, and found support there.  The RSI readings were nearly identical on both occasions, then the 34RSI bounced higher off the 55RSI.

When that "synchronicity" and subsequent bounce occurs, that's often a very nice buy signal.  It seems as though there's a compression of energy at synchronicity, which produces a rally of some sort if the RSI has "a bounce off synchronicity with its sequential fibonacci shadow."

I need to think of a better way to explain that.   

3.  Sometimes, that "compression of energy" when the RSIs come into synchronicity produces a lot more than a bounce.  It can feel more like an EXPLOSION, as it did in SVA the second time that the 34/55 RSIs came into synchronicity on August 18, 2005. 

SVA exploded out of a two-month Bull Flag, and rallied from 2.50 to 7.92 over the next two months, for a gain of 217%.

   

4. Some TA purists don't like it if you try to apply chart partterns to technical indicators, but I always say "use what works."

If you were following this thread in November, you will remember that we got all three of our upside pattern targets that were IN PLAY.  When they were achieved, some of us discussed shorting SVA.

Here's one of the reasons why.  On the RSI chart below:

a. 34/55 RSIs had put in a double top.

b. The 34 RSI fell below its "shadow," the 55 RSI

c. On the rally to our three bullish targets IN PLAY, the 34/55 RSIs were improperly positioned, with the 34RSI "chasing its shadow" back to the double top breakdown.

d. The third of our bullish targets that were IN PLAY got MADE right as the 34/55 RSIs came into "bearish synchronicity" at the re-test of the broken double top.

4. After that secondary top in SVA at 7.44 on November 22, we can understand from this RSI chart with what facility the stock was able to tank into the Bearish Gartley completion, because this indictor:

a. Already had double topped on October 17, well ahead of the secondary high in the stock.

b. Had turned bearish, with the 34RSI going below its shadow

c. Had a failed re-test of the breakdown of the double top.

So, in this case, the 34/55 RSIs were a "lead indicator," telegraphing weakness in the stock.

5. We had another "Bearish Synchronicity" and failure on January 13, when SVA ralliedl to 5.25, the first data point on our "possible" neckline of a Bullish Inverse Head and Shoulders pattern.

6. On the March 22 rally to 5.28, which is the second data point of the neckline of our 'possible" Bullish Inverse H&S pattern, we got a bullish thrust in the 34 RSI, above its shadow.  That's one of the reasons that I said that SVA looks to be shaping up here.

We got Thai's Bullish Wolfe Wave target, and this measure of relative strength (34RSI) went above its shadow (55RSI), rather than failing "at synchronicity," as it did at the November 22 high, and again at the January 13 high.

So, this indicator "could be" a lead indicator, telegraphing strength during the formation of this Right Shoulder.  We'll see.  So far, it is.

7. On March 29, in addition to the 13/21 RSIs coming into synchronicity (see the chart that I posted yesterday), the 34/55 RSIs (chart below) also came into synchronicity.  We've gotten a bounce higher off that, so again, it's looks to be shaping up.

On any further selloff in SVA next week, the RSIs would head down again, back toward synchronicity with their "shadows," and we'll if see if they can hold there, and bounce higher again.

Quote
I'm sure you'd agree there are a whole lot of ways to analyse a stock with diferrrent sets of indicators...I'm quite perplexed to know which ones to use...and when? I think different people have different answers to that question...

I agree.  TONS of ways to analyze a stock, and yes, different people have different answers to your questions.  "Use what works for you."  Personally, I don't use many indicators.  I already experience "paralysis by analysis" sometimes, just with the few that I do use.

   

Quote
sometimes, I wonder if Technical Analysis on stocks is an art or pure science?? you know what I mean?

Yes, I know what you mean, and I'd say both, but with personal computers, charts/data having become commonplace, I'd say that the science part has become more of a factor. 

"Everyone" (technicians) who is looking at a chart knows where support and resistance are, and they are buyers or sellers right there!  I see that all the time.  Like in CNXT on Friday.  3.58 and 3.59 were IN PLAY.  The January high was 3.60.

CNXT hit 3.59 right at the open, and it was done for the day!  Sold off, and closed at 3.45.  "Everybody knew it," that resistance was right there at the open. 

Quote
Anyways, thanks for all that explanation, you do an outstanding job in general to explain your side of TA on stocks. Keepi it up! 

Thanks, Vic, and you're welcome.   I tend to over-explain, so I apologize for the length of this post. 

Oliver,

Thank you for that information.  Applause.

Quote from: thai626 on April 02, 2006, 03:16:57 AM
I hope so Melf I hope it does it by next week so I can end up being top ten in the 3sof contest!

Thai,

Hey,  I didn't realize that you picked this one.  Good luck! 

Quote
P.S. By the way Melf, my wolfewave target might just hit for BBI, check it out! We'll have to wait till next week to find out. But it sure does look like that will happen.

Sorry, Thai, I forgot again to look at it.  I will.  No new Wolfe Waves identified by the Metastock Explorer the past few days, by the way.

MelfElf,

Another outstanding explanation...I don;t mind the length of your replies just because of their sheer quality. Applauds to you for such a painstakingly detailed explanation. Your posts prove why the 3SOF board is a winner many times over. Keep up the excellent work! 

Just one question about your entire analysis: what makes you pick the 33/55 RSI levels to analyse this stock...why not the other fibonacci levels in tandem instead? Do you prefer using 33/55 RSI levels over other combinations? If I used other levels instead, would they offer me similar outlooks (I realize the smaller fib levels you use, the more the fluctuation so to speak...so how do you decide which one works "consistently" for all stocks...or is it just a matter of preference ? )


Thanks,
Vic

Quote from: vic666 on April 02, 2006, 01:40:57 PM
Just one question about your entire analysis: what makes you pick the 33/55 RSI levels to analyse this stock...why not the other fibonacci levels in tandem instead?

Vic,

I use several.  Remember the first RSI chart that I posted, which was the 13/21 RSI?  Yesterday's chart was the 34/55 RSI. I also look at several others...21/34...55/89...89/144...144/233...

Quotehow do you decide which one works "consistently" for all stocks...or is it just a matter of preference ? )

That's a great question.  That's what I wondered at the outset.  What I'm finding is, no, there isn't just one that works consistently for any stock, and it doesn't work well at all for stocks that are trendless. 

I'm also finding that:

1. What we want to see first, is the 13RSI "thrust" above the 21 RSI. (13/21 is the shortest time-frame that I've looked at).  If you go back and look at that 13/21RSI chart that I posted for SVA, the 13RSI did that>  It thrusted higher,  then came back to its shadow, the 21RSI , and found synchronicity on March 14.

The bounce higher from synchronicity suggested that we "should have" at least a short-term rally of some kind.  Determining how much of a rally is where patterns can help us out.  In this case, we had Thai's Wolfe Wave target IN PLAY, so it was reasonable to expect that his bullish Wolfe Wave target would get MADE.

SVA rallied from a low of 3.75 at synchronicity on March 14, to a high of 5.28 on March 22, for a  short-term gain of 40.8%.

2. Once we get the initial thrust higher in the 13/21RSI, we want to look at either a 21/34RSI, or a 34/55RSI (or both), which would be next, sequentially.  What were they doing?  Did we get a thrust out of those?  No.  Not at first.

3. On the rally in SVA to 5.28, however, the 13/21RSI got to "overbought" (above 70).   Getting overbought is bullish.  It shows that the stock has some strength.  But, did it have enough strength to get a thrust out of the 21/34RSI, or the 34/55RSI?  Yes.  You can see that on the 34/55RSI chart that I posted yesterday.

Good.  "Our ducks are starting to line up in a row," so to speak.  If the 13/21RSI hadn't had enough strength to get overbought, which resulted in getting a thrust out the next RSIs sequentially, then we most likely would have been looking only at a very short-term rally. 

4. We want to look at how these RSIs act on pullbacks.  Are they "finding support" when they come into synchronicity?  Yes.  We saw that on both the 13/21RSI and the 34/55 RSI charts that I posted, that they held on Wednesday, March 29, at synchronicity.

So far, so good.

5. How are other RSIs acting, farther down in the fibonacci sequence?  Did we get any thrusts higher out of any longer-term measures of relative strength?  Yes.

Skipping down to the 144/233 RSIs, for example, it's "mirroring" the bullish Inverse Head & Shoulders pattern that might be forming in the underlying stock.  The 144/233 has "rallied"  with the stock to form a neckline, and the 144RSI now is "coming back toward synchronicity with its shadow," the 233RSI.

6. Notice the bounces higher from synchronicity that occurred during the formation of the Left Shoulder.  If SVA sells off right here (early this week), we want to see something similar to that.

We want to see the 144RSI find synchronicity with its shadow, the 233RSI, then bounce higher.

BRIEF answer to your question, Vic: "This is all experimental." 

Quote from: Melf Elf on April 03, 2006, 07:42:18 AM
6. Notice the bounces higher from synchronicity that occurred during the formation of the Left Shoulder.  If SVA sells off right here (early this week), we want to see something similar to that.

SVA sold off early this week and surprisingly, with sector-related stocks like GNBT and NVAX in such disarray, last week's low of 4.25 held yesterday.  The  low, which also is my entry price, was 4.25.  I still have only 16% of a position, and I'll leave it at that for now.