Chart of the Week - Pacifica, Inc. "A" Shares

Short-term Traders/Tsupiteros:	Medium-term/Position Traders:
Support - 0.115 / Below 0.16 (Stop for long positions)	Support - 0.085
Resistance - 0.215	Resistance - 0.35
Trend - Sideways to Up	Trend - Up

Pacifica, Inc. (PA) was certainly the highlight of the week as prices suddenly resumed trading last Tuesday after being suspended for around one a half months. For those who have not been following this one, the stock was suspended last July 16, 2007 because the PSE wanted to get more information on what was happening with the company. Later on, it was disclosed that Strategic Alliance Dev't Corp, a company that had a 33% stake in PA, sold its shares to Micro Tech Capital, Inc., which was a company owned by Mr. Michael Romero. It was also disclosed later on that the company's primary purpose was to be converted into a mining company. There was also an issue about the company's change of par from 0.005 to 1.00 a couple of years ago, which the company was not able to implement then. In a recent stockholders' meeting, the company decided to revert back to its original par of 0.005.

With the stock getting suspended at the height of the market, naturally, the stock dropped immediately after it resumed trading last Tuesday and closed the day at its floor price. It broke below its support at 0.115 and traded to as low as 0.085. Looking like the stock was already headed for a downward spiral, it slowly started to climb back up and one day after dropping to 0.085, the stock unbelievably hit the ceiling price once again at 0.165. Last Friday, the stock traded up to as high as 0.215 but closed the day unchanged at 0.165. What can we expect of PA in the coming days ahead?

This is one of the most volatile stock that I've ever encountered in my entire trading career. With the stock having an average true range of about 0.05, it can easily hit the floor price or the ceiling price on an average day. With this kind of volatility, it is almost useless to talk about the long-term trend of the stock since I don't think anyone would dare use a buy and hold strategy for this one since you can easily get wiped out in just a couple days of trading if your entry is not right. But just for trivial purposes, the long-term trend of the stock is still definitely up but is currently trading at overbought conditions. However, since the stock is still definitely trending in the long-term, it is difficult to say whether the stock is now forming a peak at current prices or is merely resting before it continues to move higher.

With this kind of volatility, Tsupiteros will certainly want to trade this one on a short-term basis only. I've written above that when the stock broke below the 0.115 level, the stock broke down and, expectedly, the stock ought to have continued to trend downwards. With the stock climbing above that 0.115 level once again, the stock has now formed a bear-trap, which indicates very strong support at the 0.085 to 0.115 area. With the bear-trap in place, the stock started to trend back up and even broke above its previous high at 0.17. While it did form a higher high at 0.215, it failed to close above the previous high at 0.17. It also failed to close above its opening price at 0.18. These two facts could be indicative that the stock will now form a bull-trap instead. I would look at the low at the 0.16 level to tell me if a bull-trap is now in place. If so, I wouldn't be surprised if prices to traded back down towards the lower part of its range at around 0.115 in just one or two days. Of course, if, on the other hand, the price fails to break below the 0.16 level, I would expect the uptrend to continue and prices may well be on its way towards its next medium-term resistance at 0.35.

Tsupiteros, who currently have long positions in this stock, are recommended to use a break below 0.16 as your mental stop. Those who would like to buy this stock are recommended to do so either if prices are able to hold above the 0.16 level, or, if prices drop back down near the 0.085 to 0.10 levels.

Be careful. This certainly isn't for the conservative Tsupitero. If you want to trade this stock, you need to either reduce your position-sizing significantly in order for you to bear the volatility, or, you need to play the stock with a very short time-frame. While using a buy and hold strategy with this one may certainly give you a possible windfall profit on your portfolio if you timed it correctly, the stock also has the potential to wipe out all your gains in the market for the whole year if you don't time it right.

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.