|A look at the chart shows a large cup and saucer pattern developing with the handle appearing to form a consolidation triangle. The rise on June 12 was caused by the announcement that pre-release orders for the book Harry Potter and the Order of the Phoenix were far greater than anticipated. |
|The expected profit windfall pushed the price from $1.73 to $2.98 over a period of six days. Since then it appears to be consolidating in what could be a major rise to a target of approximately $5.00 ($2.99 - 0.97 = 2.02 + 2.99 = 5.01). However, before this happens, the price would have to break above the upper triangle boundary, line BC on the chart below. This would give a very positive buy signal, but the price could meet resistance at $2.99, fall back turning the BC resistance line into a support line, and then possibly rise to retest the $2.99 resistance. A break above this level is a break out above the cup and handle formation, confirming the rise to the estimated target of $5.00.|
|Barnes and Noble .com|
|Graphic provided by: AdvancedGET.|
|Finally, do note that the RSI indicator is pointing downwards, with a possible buy signal at the 38 level rather than the traditional 30 level. |
|The share price also gave a JM internal band "buy" signal in June as shown on the chart, and has not given a sell, although traders would have closed positions on rising stops in the fall from the high at "B." |
An internal JM band, as showin in the chart above, is a 28-period simple moving average offset upwards by 6% and downwards by -6%.
|I would not buy this share yet-- but it is on my watch list. As I wrote above, it is not what I feel, but what I see that is important and I am waiting for a very definite buy signal to be given, before I am tempted, one way or the other. |
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