Tuesday, December 22, 2009

CTFO III

I've tried to visualize the stock's ambivalence between solid growth stock and super-performer by drawing to channels based on the past year's developments. Note that the parallel nature of the channels means that as the over stock price increases percentage movements within the channels decrease. And despite the V style nature of the two channels movements between the channels are not entirely proportional either (percentage-wise, e.g. from $4 in June to $8 in September equals from $8 to $12 in the new year).



What I get from this chart, then, are some good guidelines for assessing the stock's price developments. The longer it takes to break out of the black channel the less likely it becomes to be followed by a move into the red channel. I expect this move to take place in January, and if it fails to occur, the dynamic of this stock may be much more conservative than I originally anticipated (mid-20s by summer '10).

No comments:

Post a Comment