After prematurely getting into ELI the other week, a case of being in limbo happened. Thinking that it was already breaking out, I got in at .80 and waiting for .87. While waiting, ELI's pattern became a flag from a pennant, which is still essentially the same but the resistance and targets have now changed.
The resistance has become .80, so a proper buy was at .81, with a target of .90. It sure took its damned time before breaking out. I was already thinking maybe this flag has fizzled out since it took longer than usual to break out.
Yet, after waiting for longer than the normal amount of time, we tarantraders are gifted with a breakout yesterday. ELI ended at .83 with a volume of 55 million shares. Could this be the start of a new trend? It's very possible. That, notwithstanding the news of ELI issuing stock rights at par value.
What would that mean for ELI? The fundamentalists say that in order for any stock to issue rights at par value when the price of the issue is below par means that the stock has to be pushed to par value and beyond to make the rights attractive. Of course, that's the other view to this of which, it may have some logic to it, yet some speculation too.
So what to do with ELI after holding it for some time? As I mentioned in my earlier post about being in trading limbo, we wait. The target is coming, or we get stopped out. It's that simple.