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Chart of the Week - Apr 7, 2008

 Crown Equities, Inc. (CEI)

CEI Monthly Chart - Continuing to Trend Up Strongly

charts are courtesy of Metastock

CEI Weekly Chart - Trying to Breakout Above its Consolidation 

charts are courtesy of Metastock

CEI Daily Chart - Trending Up but Appears to be Encountering Resistance 

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

Crown Equities, Inc. (CEI) mysteriously generated liquidity and volume since Thursday and is now starting to climb. From an average volume of just 5 to 10 million a day, volume of the stock suddenly catapulted to 558 million last Thursday and 357 million last Friday. The volume would have been justified had the stock climbed limit up and there were several oscillations along the way. However, the stock merely climbed from 0.075 to 0.0875. Wash-sales maybe to trap the public? Or, could there really be something bullish going on but was simply taken advantage of by some major shareholders, who dumped their stakes to willing buyers? Whatever it is, something fishy is going on. With a lot of people entering this stock in the last two trading days, I have decided to make this my "chart of the week".

Unlike 90% of all the other stocks in the market right now, CEI is actually trading near its highs last year and has actually even registered a new 8-year high by climbing above its high last year at 0.086. This fact alone tells us that the stock is very strong as compared with the rest of the other stocks in the market. The monthly chart of the stock above shows that the stock is continuing to trade within a very strong uptrend, which, if its trend continues, could potentially even climb to as high as 0.014 or 0.015 in the next few months thereafter. That is, of course, as long as it continues to hold above its short-term trough at 0.055 to 0.060. I will continue to be bullish in this stock in the long-term as long as prices stay above 0.055 to 0.060.

For the medium-term or with regards to its weekly chart, you can see above that the stock has been trading within a clear-cut consolidation between 0.060 and 0.085. With the stock closing the week at 0.085, it is now testing this resistance line and is now at a make or break situation. If the resistance breaks, then, target to the upside may already be the 0.0110 level. But if the resistance holds, I will simply assume that it will drop back down towards its support at 0.060.

The short-term is what is puzzling me at the moment in this stock. With the amount of volume that it generated in the last two days, prices ought to have catapulted to the upside already by now. Obviously, while there are a lot of buyers in this stock, there are also a lot of sellers. You can see in the chart above that the stock is now trading within an upward channel in the short-term, with its support currently pegged at the 0.080 level and its resistance currently pegged at the 0.090 level. After forming a long white candle last Thursday, the stock now formed a potentially bearish spinning top pattern last Friday. Could this mean that prices are going to drop back down towards 0.080? Or, is it merely resting before it continues to trend up? Take note, if prices are able to hold above 0.0825 and eventually breaks above last Friday's high of 0.090, prices may already climb towards its psychological 0.10 level. But, if the stock fails to hold above 0.0825, the stock may drop back down towards the 0.075 level.

Tsupiteros, who currently have position in this stock, are recommended to just hold and use a break below 0.0825 as your mental stop. Those who would like to buy this stock may do so as long as prices stay above 0.0825. Position-traders, on the other hand, who would want to buy this stock, may want to buy as close to 0.075 as possible with stops placed on the break below the same level. If there really is something bullish about this one, it should no longer break below 0.075. In fact, it should no longer drop back down anywhere near that level anymore.

Be careful Tsupiteros.

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.