"reverse" Head And Shoulder?

[joestool]

This site issued a "BUY" recommendation claiming the recent heavy volume spike is

the completion of a "a classic reverse head & shoulder bottom. A very bullish chart pattern."

 

It looks to me like a "GMTFO as soon as I can break even" by all those longs stranded at the last heavy volume spike last MAY when WEBM was about the same price. I'm no TA expert so I'd appreciate your view.

Thanks!

 

 

"Focus Stock Charts - Recent Picks"

[Guest]

Yep, WEBM does have a valid H&S Bottom formation - although I would have liked it better if the volume below the right shoulder was lower. (Normally the volume should be the highest under the left shoulder or, more rarely, under the head.)

 

If I was trading this stock, I would have bought much earlier - on October 12, when the MACD crossed up and several oscillators crossed above Dover Sole territory. Generally, the technical picture doesn't look bad. The only thing that bothers me is that the 200-dma is still sloping down. But at least the price is above it.

 

If you decide to buy it, it would be wise to have a stop somewhere in the 10.00-10.25 area, depending on your buying price and risk tolerance. Don't be surprised if you're stopped out at a loss - this stock is still in a bear market and has already progressed quite far in its bear market rally. It's difficult to tell at this point whether a genuine uptrend will develop or whether the rally will end soon.

 

Regards,

Vesselin

[joestool]

Thanks a lot for your input bontchev, I went long ATM 10 puts on this POS the first week of JAN after it shot up from the 8's to the 10's anticipating a dose of reality at the 21JAN earnings announcement would smack it back down.

I was wrong.