October 6, 2015
YEHEY yearly chart from 2012 shows a morning star bullish reversal pattern. Price is currently at the top of the midline, supporting its bullishness on a yearly time frame.
The weekly chart shows shallow retracements. September 2015 Fibonacci retracement was limited to 38.2% Fibonacci level . Succeeding retracements from highs must stay above this level to maintain momentum or else risk sideways to downward movement for the next few months.
While Fibonacci levels define ranges for stock price movements and indicate bullishness or bearishness, an important factor that determines momentum is the midline between these levels. In the YEHEY monthly chart below, notice how prices pierce through midlines then retrace. This is considered a pivot point . A breach of a midline to the upside is followed by a surge in prices (a long green candle). A breach to the downside is correspondingly followed by a huge decline. For prices to breach the next Fibo level, volume must be above the previous period, whether daily, weekly or monthly, to avoid volume divergence. Price is currently challenging the 23.6% Fibonacci level at 3.68. If this level is breached, the next midline resistance is at 4.09. Should price stay above this level at the close with significant volume , chances are high that the all time high of 4.50 will be revisited. I would personally cut my losses at the midline below 23.6% Fibo at 3.43.
YEHEY RSI resistances support Fibonacci level breaches to the upside. Currently, RSI monthly is at 81, a break of previous high at 79.
However, weekly RSI shows a bearish divergence. RSI must close above 83 at end of this week or risk price or time consolidation next week.
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