Thursday, October 6, 2011

$FASter $FAZterrrr . . . stoppp!

FAZ daily
Deeper discount price ahead? 

11:53 am (Hawaii) As noted earlier, maybe FAS rises another day on this new uptrend, but after gaining 37% from Tuesday's bottom, it's less likely now than it was yesterday or this morning. On the other hand, FAZ has taken its usual beating after stretching to the limits of its range. This is 9 out of 9 times FAZ as dropped drastically — this time it's 28% off Tueday's intraday high of 81 — when a long white/green candle is followed by a long black/red candle. The first of these drops during the time frame of of August to the present took FAZ from 81 to 54, a 33% decline.

The next decline from 72 to 50 was 30%. The rest were large, each one of them. But 33% is the largest dropoff. If FAZ sells off to the lower trendline, that puts it at 55 — just 3 bucks and change away. The one observation that's unavoidable: Since August began, there hasn't been three consecutive days of long red/black candles until now. Is it time for a major bounce?

I wrote earlier today that the last two instances when FAS dipped below 10, it rallied to 15+ and 12+. FAS is at 11.43 in afterhours trading. The one difference in these FAS rallies is that the current one began with a opening price (Tuesday) below 9.00.

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