For those of you patient enough to revisit this site despite my infrequent postings, here's a little reward. My posts have been few, but all my stock tips to date have played out well. Let's see how this one does...

In previous featured trades, I suggested that I expected Akme Packet to move much lower, first to $23 then after a "dead cat" bounce, on down to as low as $10. Considering this was trading around $65 when I called it, and profits were hitting new highs, some would have called this an outrageous call.

The more I watch stocks move, the more my belief in the triumph of technicals over fundamentals plays out. Time after time I see wonderful companies collapse in price due to the vagaries of mass psychology. Or conversely, I see horrible companies continue to climb in value as passions seethe...

Re checking the charts today, I see that the pyschology of the market has not changed much.

See how we now have the first signs of bullish divergence between the price lines and the 14 day relative strength lines (rsi14)? The former are sloping down while the rsi is flat. If we look at stochastics for the same interval, the trend is still down a bit.
So the stock should move just a bit lower, probably to its floor at 26.96 (not the $23 I suggested earlier), then move up from there.

I will establish a long position as soon as the stock makes a higher high. Right now that would be at a price of 32.33, but if the stock moves lower (as I expect), so will my triggering point.

But remember, I will look to sell as soon as the stock approaches $40.

As always, be aware that technicals are not a science, they're an art, and a pretty messy one at that. You can lose money in stocks, so make sure you set limits on all your positions.

In my view, this suggests the price will move up now, to retest its former floor at 40, which now becomes a ceiling.