Sunday, March 18, 2007

Redtone – more distribution envisaged

Redtone closed with a black engulfing candle last Friday. It opened at 83c and closed at 78.5c with the intra high at 90c. The closing price is lower than the opening price, hence the black candle.

Volume was exceptionally high at 410,003. This kind of volume has not been seen for a long time at Redtone. The candle clearly shows that distribution is going on. For those who are contemplating to buy Redtone, now is definitely not the time. Wait for the distribution to complete first before you make any decision.

If I am long on this counter, I will immediately make my exit, come Monday morning.

Support for the stock is at 63c while strong resistance is at 91c.

The above commentary is my opinion accordingly to my reading of the chart of Redstone.
If you listen to me, you do so at your own risk. The writer disclaims all liability for your perusal of this blog.

Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you are in trouble.