At the start of 2006 up to Oct. 2006, this has just been going sideways. It started descending from that time and again went sideways at the start of 2007. It was only very recently that DROOY broke out. Broke out of what? From what this looks like, it is an inverted head & shoulders formation. Based on this pattern, the breakout point is 10.75 and this is pointing to an upside target of 15.98. The proper time to cut the losses here is once it goes back under the neckline.One thing noticeable here is that the volume does not follow the textbook requirement of this pattern. The answer to why that is, is because this pattern has become secularized; meaning, it has surpassed the 10-month gestation period and after taht, there are no guarantees that volume would follow what the textbooks say.
Despite a general market sentiment that is quite bearish (check out my earlier post called D-OW!), DROOY seems to be one of the exceptions as it is actually bullish with this inverted reversal pattern. Even its MACD says so as the fast line is already above the slow line and both are above the zero line. This already gives me teh feeling of bullishness for this stock, aside from the fact that there was a bullish divergence during Dec. 2006 to Mar. 2007.
So what are you waiting for? Everyone get on the gooooooooolllllllld train.
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