LC Chart Jan. 05, 2012

I’ve been hearing and reading a lot of opinion regarding LC/b’s price movement. Since this stock issue has become one of the market’s favorite, I thought of sharing and giving my views as well. So far almost all analysis I’ve had read are right. Everything just depends on the time horizon one is looking at.

Scenario A: Uptrending Triangle Formation

Bull Camp is saying that LC is in Uptrend Channel and that we will soon see a break above 1.81 and that price will initially be targeting levels between 2.18 to 2.26. Time frame of wait will be shorter.

Note that under this theory, LC is still expected to retrace back to “Minor Descending Triangle” previous breakout point level seen at 1.57. Normally healthy retracement doesn’t lead to touching 1.57 but instead price is seen to hover above it before resuming an upward movement.

Scenario B: Ascending Triangle Formation

Bear Camp on the other hand is saying that LC is completing an Ascending Triangle formation and that price is seen to break below 1.58-1.54 (Point A) and move lower, towards the lower boundary of the pattern which is between 1.40-1.40 levels. Once pattern is completed, LC is seen to resume its uptrend move and will initially retest 1.74 resistance level. It probably will then eventually break above the 1.81 upper boundary of the ascending triangle formation in due time but this will really take a longer time to complete.

Personally am neither pro-bear nor pro-bull. I am pro PRICE ACTION. The deciding factor will be the 1.58-1.54 support line. THIS WILL BE THE FINAL ARBITER POINT WHICH WILL DECIDE WHO IS RIGHT OR WRONG. As long as price moves above this level, the 2.18 to 2.26 short term target will remain viable. On the other hand, if 1.58-1.54 level breakdown, then my holding time analysis target will change from shorter to much longer wait period with possible testing of support seen between 1.44-1.40 levels.

ALL BETS ARE OFF IF 1.38 LEVEL BREAKS.

Layman’s Definition:

Retrace/Retracement means pull back.

Resistance means a level or a price point where majority of sellers are seen to converge.

Support means a level or a price point where majority of buyers are seen to converge.

Breakout/Break above means a price move above a resistance.

Breakdown means a price move below support.

Bullish/Bull means to have an optimistic, positive view on price action. (Anticipating further rise)

Bearish/Bear means to have a pessimistic, negative view on price action. (Anticipating further decline)

LC Chart Dec. 07, 2011

The last time I made a comment on LC was in my newsletter issue dated recently on December 5, 2011. In that newsletter I specifically stated that LC will fail to break above 1.82 (letter E) on its first attempt and will pullback. Well today, I have decided to do a follow through analysis based on that statement I made.

The chart above clearly reflects a failure to break above 1.82 level (letter E) which is the recent high made last Aug. 8, 2011. After touching 1.80, the stock fell towards 1.65 and closed at its low. I believe that LC will undergo a consolidation from here on wherein stock price is expected to trade in a narrow range.

This is better seen on the chart above, drawn with a possible symmetrical triangle pattern (denoted by letter A and B Blue lines) forming. The lower border of the triangle formation mentioned will be seen at 1.62 or 1.59 level (support, letter A) while the upper border will be seen between 1.76-1.74 levels (resistance, letter B).  These will be your buy and sell points.

The next move after consolidation will be the most important to watch. It will determine where future price of LC will be heading.  A break above the upper border line of the symmetrical pattern will mean a possible minimum target of 2.0 (letter C) while a break below will result into a price drop of as low as 1.40-1.46 levels (letter D).

Note that all the resistance and support levels presented here are also all connected with the previous chart study I made last Nov. 18, 2011. As such, every-time a resistance is broken they automatically become a support and vice versa.

Personally, I think the price will remain above 1.59 level as it consolidates but be sure to be ready to cut just in case price falls below it on closing.

Kindly disregard above’s analysis and wait for an update. Price did not go into consolidation but rather moved different from what was expected. It warrants another analysis. For trading decision refer to PACS price level.

NI Chart Nov. 28, 2011

NI is suspected to be trading in a bullish Inverted Head and Shoulder formation and might be in a Cup and Handle pattern to others.  Note that for this pattern to have some form of legitimacy, four things must be present: a neckline (breakout point), head, symmetry between left and right shoulder and a good volume on the right shoulder. As such, all four are present in the chart above.

Knowing that a possible Inverted Head and Shoulder pattern exist won’t be enough if we are to try to deduce future price action of a stock. We will have to go further and look at the underlying formation hidden inside the general pattern. Let’s begin; a closer look at the right shoulder of the Inverted H&S formation reveals that there are two more patterns within.  One is the  uptrending “Rectangular Channel” denoted by solid black line (upper border) and the broken black line (lower border). The other pattern which is the   bearish “Ascending Triangle” as shown by the  blue lines is seen within the “Rectangular channel” formation. Basically what we have here is a pattern within a pattern.

Now that we are aware of the patterns involve in this stock, let us now discuss the resistance, support and possible future price action that the stock may take.

Scenario #1 (A-B-C movement)

Under this scenario, stock will trade within “up-trending channel” seen at the “right shoulder”. The stock price is expected to break above the strong resistance found at  4.45-4.67 (letter A) which is the neckline of the Inverted H&S pattern. It will then move towards the next resistance seen between 5.37-5.50 area (letter B) where profit taking will occur. Price will then retreat just above the neckline area (letter A). It will then resume its uptrend movement and march towards 6.00 where price level target is expected to be completed. This is the most bullish of all scenarios.

Scenario #2 (A-D-C movement)

Here NI is expected to test major resistance levels found between 4.45 -4.67 (letter A) but will fail to break above on the first attempt. The overall bearish tone of “Ascending Triangle” pattern will lead to a price pullback towards 4.08 or 3.85. (letter D). Attempts made to break above the neckline resistance (letter A) will be seen to become successful on the 2nd or 3rd try. After breaking above, the stock price will then track the movement under scenario # 1 which will eventually move towards the target price seen at 6 (letter C).

In summary:

4.45-4.67 – initial resistance

5.37-5.50 – secondary resistance

6.00 – possible target resistance

4.04-4.13 – initial support

3.75-3.85 – secondary support

Remember once resistance is broken, it becomes a support and vice versa. The most crucial area to take into account is the neckline found between 4.45-4.67 (letter A)…bull above and bear below. Lastly, all bets are off at the close below 3.75 level.

IP Chart Nov. 25, 2011

Here is an updated chart of IP. The areas of resistance and support are basically the same based on the chart I posted last November 14, 2011. Depending on how fast prices will rise, strong resistances are most likely to be seen in the areas between 2.71-3.20 levels (triangle, letter B). Initial resistance will be seen between 2.71-2.78 levels. These are the areas where sellers are likely seen to converge. It will then be followed by 2.88-2.92 and then 3.08-3.16 levels.

Momentum will be seen to resume again once stock price moves above 3.20 level with the next possible target resistance seen at 3.75 (letter C).

On the other hand, failure to move past the triangle area resistance posted  (triangle, letter B) will mean a pullback and possible retesting of strong support areas found in between 2.35-2.43 levels (letter A). Specifically, 2.43 as first support then 2.40 and followed by 2.35 level.

LC Chart Nov. 18, 2011

Based from yesterday’s trading, LC showed a breakout from a triangle formation at 1.33 (letter E) level. What it means is that the stock has shown a potential for the price to move even higher.  But in order for this potential to become valid, the stock price has to hold above 1.33 therefore becoming also a point where stock support will be seen in case stock price pulls back.

If 1.33 ( letter E ) level holds on pullback then the  next possible resistance target to look at will be between 1.47 to 1.52 (letter F) levels then followed by 1.61 to 1.66 (letter G).

On the other hand if 1.33 fails to hold, then LC will be expected to go back to its original consolidation range where it use to trade. These borders are 1.33 (upper – letter E)  and 1.24 (lower – letter B). Initial support point below 1.33 will be at 1.30 (letter D) followed by 1.24 (letter C).

A further break below 1.24 means a possible retesting of levels found between 1.14 to 1.15 (letter A) which will not look pretty in the chart.

In summary, watch 1.33 closely…Bull above and more consolidation below it.