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Chart of the Week - February 23, 2009

Apex Mining Company, Inc. (APX)

APX Monthly Chart - Formed a Possible Higher Low at the 1.00 Level

charts are courtesy of Metastock

APX Weekly Chart - Testing its Medium-term Resistance,  

charts are courtesy of Metastock

APX Daily Chart - Bearish Evening Star Pattern

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

One of the exceptional performers in the market recently aside from MER is Apex Mining Company, Inc. (APX). I guess the insiders of this one got a reason to push the stock to unimaginable levels when the price of Gold climbed to the roof the last few days. Let's see how the technicals look like.

On the monthly chart, you can see that the stock has bounced off a major support line as highlighted by the blue solid diagonal trendline in the chart above. This certainly is a bullish sign and could indicate that, on the bigger picture, the stock has already formed a base for a new high. The only problem on this picture is that volume did not increase significantly on the rebound, which may indicate that the upswing may not be standing on solid footing. The weekly chart of the stock is showing the same behavior - a strong upswing but on low volume. You can also see in the weekly chart above that the stock is currently testing its resistance at current levels. In my opinion, this resistance area, which is around the 4.00 to 4.70 levels, is a formidable resistance to break. For these levels to break, volume would now be a requirement so that it could absorb all the sellers who would be selling at those levels. On the weekly chart, the stock still formed a white candle, which indicates a continuation of the current trend, however, the daily chart is already showing a contrasting picture.

On the short-term, or, in the stock's daily chart, you can see that prices appear to have formed a bearish reversal already by way of an Evening Star pattern. The heavy volume on the stock when it peaked at 4.30 last Thursday, may indicate distribution. While the stock is still definitely trending up, this current correction is already due as the stock has already doubled in price since its trough at 2.08 just last Feb 4, 2009. Major support of the stock in this time-frame is at the 2.50 level but I really doubt whether prices can easily drop back down to that level. Above 2.50, next support levels are the psychological 3.00 level as well as the 3.50 level.

In summary, the stock is slightly bullish on the long-term as prices appears to have formed a higher low already, it is bearish on the medium-term as prices appears to have hit a brick wall at the 4.30 level, and is also bearish on the short-term as prices appear to have already reversed its trend from up to down.

I sure hope Tsupiteros were already able to take profits in this stock either last Thursday or last Friday. If you haven't, I would suggest that you try and take profits as close to 4.00 as possible. I would not recommend buying this stock yet at this point, but I am expecting prices to form a short-term trough somewhere between 3.00 and 3.50. After this big run-up in the last few days, I wouldn't expect any new highs anytime soon. Rather, I would expect prices to probably consolidate within a range as those who missed the move from 2.08 to 4.30 are looking to buy on this current correction, while those who have positions and have missed the peak at 4.30, will be looking to take profits as close to that level as possible.

Position-traders, on the other hand, may just want to buy as close to 2.50 or 3.00 as possible. Just remember, if this current uptrend of the stock really has something in it, prices should no longer break below that major support at 2.50.

Notes:

Short-term Traders/Tsupiteros vs. Medium-term/Position Traders: Recommendation for short-term traders or Tsupiteros are meant to be used by traders whose holding period are limited to one day to two weeks. Medium-term or position traders are meant to be used by traders whose holding period are two weeks to three months. Long-term investors whose holding period is more than three months should not follow these recommendations.