FRO -- Potential Breakout on Wedge

Discussion in 'Stock picks and trading strategies' started by alpha, Dec 18, 2010.

  1. alpha

    alpha New Member

    Hey Guys,

    I am new to this forum, so you have my sincere apologize if I have broken any forum rules.

    Please take a look at a stock I have had my eye on for quite sometimes -- FRO. This stock has been flat for a few days indicating the strength of a 3 month resistance line and if you extend the chart time, the same resistance line held last year. There is also a wedge pattern that it is occurring on is on the potential for a break out. Moreover, all the indicators show that this stock is oversold. The Stochastic are oversold and are beginning to move up, the MACD is just about to turn positive, and the RSI has been picking up steam.

    Given the situation of the stock and the fact, FRO is at rock solid resistance, I predict next weeks opening bell will be a huge move up for FRO.

    Tell me what you guys think!

    Warm Regards

    FRO.jpg
     
    Last edited by a moderator: Mar 22, 2014
  2. starman45

    starman45 Member


    Imho, you must first recover 26.20 dollars and then see if the support holds.
    Chart daily (courtesy of FreeStockCharts.com)
    fro.png

     
    Last edited by a moderator: Mar 22, 2014
  3. alpha

    alpha New Member

    Hi Starman,

    Thanks for replying. But wouldn't you agree that support has been tested and held. As you can see the support goes all the way back to March of this year. This is solid support -- this is indicated in the trading for FRO the past few days as it is unable to break the 25 mark. The resistance at 26.20 is much short term.

    I believe, given the indicators and the strong support holding up that this trade qualifies as "low risk, high return trade".

    What do you think?

    Thank You

    FRO1.JPG
     
    Last edited by a moderator: Mar 22, 2014
  4. starman45

    starman45 Member

    I zoomed the daily chart.
    From it, in fact, there is support at $ 25.
    It is only daily support, but not even weekly.
    However, it can be valid only if confirmed.
    Imho, confirmed or unconfirmed, it is always a trade against the trend, at the time.
    Therefore, a high-risk trade.
    Chart daily (courtesy of FreeStockCharts.com)
    fro.png
    __________________
    just an impression on the markets in my blog
    http://starman45-finanzaepoesia.blogspot.com/
     
    Last edited by a moderator: Mar 22, 2014
  5. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Alpha,

    The chart in your first post is actually a Descending Triangle, a bearish continual pattern. It is far more noticeable on the weekly. There is support at 25, but that was the breakout point in 2009. Watch for another leg down. Don't go long unless it can move up again breaking out of the down trend at about 26.20-26.50 range. I just don't see that happening now.

    I loved playing this stocks channel/breakout in 2009, but 2010, just hasn't been the same. I actually have played puts on FRO since this past summer after the double top/rising wedge/up-trend breakdown on the weekly. I just hope for another down push below 25 towards 20, which IMO is what the chart is set for. The 22.5 Feb puts are due to bounce if that happens.
     
  6. starman45

    starman45 Member

    Good weekly close on support a 27.50.
    Expect a retracement to see the power of buyers.
    fro.jpg
    Chart weekly (courtesy of FreeStockCharts.com)
    __________________

    just an impression on the markets in my blog
    http://starman45-finanzaepoesia.blogspot.com/
     
    Last edited by a moderator: Mar 22, 2014
  7. starman45

    starman45 Member

    Rejected by resistance at 27.50;
    is still struggling.
    We'll see if the support will work well.
    fro.png
    Chart daily (courtesy of FreeStockCharts.com)
    __________________
    just a weekly impression on the S&P500 index in my blog:
    http://starman45-finanzaepoesia.blogspot.com
     
    Last edited by a moderator: Mar 22, 2014
  8. starman45

    starman45 Member

    Last edited by a moderator: Mar 22, 2014

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