For GT blog May 02, 2008
Crystallex dropped like a rock on Wednesday April 30 (not shown in the chart) after the company released a statement that put doubt in investor minds about the future exploration of Crystallex's Las Cristinas mine in Venezuela.
Crystallex had become a "torpedo" stock
There are few defences from the torpedo - one is to diversify and the other is to use technical analysis as a tool for signs of smart money leaving the stock.
Keep in mind that Crystallex trades in Toronto and New York and so your best option when charting is to go where the volume is – New York.
Note the “good news” day up bar of February 28, 2008 to the left which is accompanied by a high volume bar. This was a good technical day with the rising price confirmed by higher volume. The positive news of the day was a statement by the company carried by Briefing.com recapping the progress for the Las Cristinas gold project in Venezuela.
Note now the price spike in the middle of our chart. On March 24, 2008 the stock opened with a gap at $2.68 and traded as high as $2.83 before suddenly reversing to close near the low of the day at $2.35 on heavy volume.
Crystallex had put in a reversal day which is a one-day chart pattern where prices sharply reverse during a trend on larger than average volume. There was no news to justify this activity. For some unknown reason – someone was selling. Was it you?
Crystallex dropped like a rock on Wednesday April 30 (not shown in the chart) after the company released a statement that put doubt in investor minds about the future exploration of Crystallex's Las Cristinas mine in Venezuela.
Crystallex had become a "torpedo" stock
There are few defences from the torpedo - one is to diversify and the other is to use technical analysis as a tool for signs of smart money leaving the stock.
Keep in mind that Crystallex trades in Toronto and New York and so your best option when charting is to go where the volume is – New York.
Note the “good news” day up bar of February 28, 2008 to the left which is accompanied by a high volume bar. This was a good technical day with the rising price confirmed by higher volume. The positive news of the day was a statement by the company carried by Briefing.com recapping the progress for the Las Cristinas gold project in Venezuela.
Note now the price spike in the middle of our chart. On March 24, 2008 the stock opened with a gap at $2.68 and traded as high as $2.83 before suddenly reversing to close near the low of the day at $2.35 on heavy volume.
Crystallex had put in a reversal day which is a one-day chart pattern where prices sharply reverse during a trend on larger than average volume. There was no news to justify this activity. For some unknown reason – someone was selling. Was it you?
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