Thursday, October 15, 2009

Orko Silver Chart October 15, 2009

Orko Silver Daily Chart
Orko Silver Chart October 15, 2009
Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

A quick run down here. Orko Silver opened lower at 0.98, silver by then was already trading lower around 17.40. The morning trading saw some big volumes of shares traded which got the price up to 1.00. Sadly a little after twelve silver got pulled down again pulling down on commodities.

All in all not a bad day, again very large volume of shares traded, around 830K. But that's not all, I missed this one, got alerted to it by another Orko Silver trader and after checking it out I must say that indeed that looks like a Cup and Handle continuation pattern. There are some points to consider whether this qualifies as a Cup and Handle.
  1. Trend: To qualify as a continuation pattern, a prior trend should exist. Ideally, the trend should be a few months old and not too mature. The more mature the trend, the less chance that the pattern marks a continuation or the less upside potential.
  2. Cup: The cup should be "U" shaped and resemble a bowl or rounding bottom. A "V" shaped bottom would be considered too sharp of a reversal to qualify. The softer "U" shape ensures that the cup is a consolidation pattern with valid support at the bottom of the "U". The perfect pattern would have equal highs on both sides of the cup, but this is not always the case.
  3. Cup Depth: Ideally, the depth of the cup should retrace 1/3 or less of the previous advance. However, with volatile markets and over-reactions, the retracement could range from 1/3 to 1/2. In extreme situations, the maximum retracement could be 2/3, which is conforms with Dow Theory.
  4. Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle. Sometimes this handle resembles a flag or pennant that slopes downward, other times just a short pullback. The handle represents the final consolidation/pullback before the big breakout and can retrace up to 1/3 of the cup's advance, but usually not more. The smaller the retracement is, the more bullish the formation and significant the breakout. Sometimes it is prudent to wait for a break above the resistance line established by the highs of the cup.
  5. Duration: The cup can extend from 1 to 6 months, sometimes longer on weekly charts. The handle can be from 1 week to many weeks and ideally completes within 1-4 weeks.
  6. Volume: There should be a substantial increase in volume on the breakout above the handle's resistance.
  7. Target: The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.
Taken from stockcharts.com

I'd say we qualify based on those points!

If the breakout occurs then we are looking at a possible target of 1.40 which is the depth of the cup added to the high of the cup. That would be adding (1.00 - 0.60) + 1.00 = 1.40

Lets hope the pullback in gold and silver is over and done with quick smart. Its just a pullback. Gold pulled back to the 10MA line and that was with hitting a low of 1046. Silver did the same however it made a bigger dip under the 10MA and hit a low of 17.29.

Gold and silver could fall a bit lower to complete the shake out and then head up again to continue making the run to breach 1100. Now, that will not be this week but it will come on the boards in the time to come.

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1 comment:

  1. Link to 3D model Orko Silver
    http://www.investorhub.ca/3dmovie.wmv

    (other link removed due to too large bandwith)

    ReplyDelete

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