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FloatCharts.com
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October 14, 2006
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Rambus Inc. (RMBS)
When a stock's price has been in a long decline and then rises far enough to penetrate its upper float channel line, there are three possibilities ahead. 1) The most likely possibility is that the upper float channel line will act as resistance and the price will immediately head lower. 2) The second possibility is that as the price moves lower it will find support at either its 25%, 50% or the lowest (100%) float channel line. If this happens there is a strong probability that the stock will put in a bottom and the long term trend will change from down to up. 3) The third possibility is that the upper float line has lost all resistance capability and the price will easily continue to move higher. This is the least likely scenario. Thinking that a penetration of the upper float line is a buy signal is a mistake and will easily lead to losses in your portfolio. So what did Tuesday Morning Inc.? It broke out and we're in a wait and see situation. The most likely situation is that it will pull back from here because not only has it just run into resistance but it's in the Retail Sector which is currently at extreme over-bought levels. So it's definitely a high risk buying situation. It might continue higher from here but it's more likely to pull back. Now look at the second chart, it's Rambus Inc. I sent it out in a Free Weekly Stock Report back on August 26th. It has moved up nicely. It's a semiconductor stock which is benefiting from the rally in technology which is still underway. It's likely to continue higher. Always remember, you never ever truly know what a stock will do tomorrow. This is because stock movement is not a mechanical process. Stocks move based on the decisions of human beings and predicting human decisions is never certain. If a large number of the people owning either one of the stocks mentioned above were to decide tomorrow that they wanted to sell then the stock could easily sell off. If a large number of people decide to buy then these stocks could easily blast higher. It all depends on the decisions of people. STUDY THE
CHARTS ABOVE Have a Good Week, Be Prosperous, and Keep in Touch
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