Saturday, January 27, 2007

MEOH Analysis for 01.27.2007

Monthly chart showed stock made all time high this month. With the new high, there was profit-taking. This price action created a dark cloud cover pattern, creating a warning signal that a pullback might be in order. There is no confirmed sell pattern off the monthly chart currently.

In the short term, there is a confirmed sell pattern off the weekly chart. Exhuberant buyers took the stock to all time highs, where there was immediate profit-taking. The week's price action wiped out 5 weeks of gains in the stock, taking price to close below the prior high (LIS) at $26.81.

Exhuberant buyers gapped the stock up at the open to take it to all time highs. The following day, the bears came out in force, and gapped the stock down at the open, and took it down hard, to close the day below the prior high and LIS at $26.83 area. This created a kicker signal pattern, which indicated that investor sentiment had immediately changed. Friday's price action created a close below the 50sma. Look for continuation next week.

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