Thursday, September 19, 2013

INP and DUST update

I try not to care about macro events and FED decisions etc. I wan't to be purely technical. So I just conclude that for whatever reason a bunch of charts had an interesting day yesterday. In the case of INP it completed a downward move comparable to the last leg up. So what's next? While it's not possible to know the exact shape of the supprting floor for the megaphone pattern of INP it can at least be estimated to be somewhere in either of the two concave lines drawn on the chart below. (The chart is 3X reversed) It's possible that the momentum will push the chart even lower put pretty soon we should see a bounce and a crawl up towards the trendline. I pointed out two possibles scenarios. Both are the same move, it's just a matter of scale. The point is that soon a bounce towards the trendline should be expected. It could be played both on the up move before the trendline is reached and on the downmove after.

Regarding DUST, a bounce towards the trendline is what just happened. But personally I got greedy and wanted to get in at the last minute so except for an initial small position I didn't make much money on this latest move down. I thought the bounce would go just a little bit further up at the 40 level.

After this latest fall in DUST I don't have any read on what DUST is going to do next. The megaphone pattern is finished and I have to greatfull that it was a predictable and profitable pattern. There could be a second attempt towards the trendline but it's nothing I'm going to bet on. If there is a second attemt for the trendline it would be as a new megaphine pattern starts. It's possible that happens, especially considering how big the latest megaphone pattern was. Then DUST is very tradable again, but for not I'm just going to keep my small short position at least for a few days longer and continue to look for megaphone patterns in general.

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