Good point. This is the lowest weekly close since

Good point. This is the lowest weekly close since the April 2011 rally, and the first week to trade entirely below the 200 week moving average. This might stop some people out because they bought higher and the closes below the 200 week moving average are their exit signal.

However, for someone like me who likes to buy low this is actually a good signal. If I were to come into this stock for the first time, knowing nothing about the oil business and just looking at this as a trade, I would see the 200 week moving average and I would buy that pierce with an expectation of a move back above it.

Unless we see a series of closes below last week's lows I would not be worried about a change in trend at all. The trend in this stock over 200 weeks, or roughly 4 years is up. Yes it has pulled back, but the overall trend is up and it is currently at the low of the trading range.

I want to refer back to the late June rally again. If you look on the weekly chart below, you will see that I have identified a bottoming candle from the June rally and that we have another one on this week's candle.

A bottoming candle is where a candle gets pushed way down from it's open, but ultimately closes up towards the highs, usually in the top 1/3 of the candle. This makes the tail look long and the body looks small. It appears at the lows of charts usually as an indication of bulls being stronger than the bears.

If you take a look at my Ice Cold Traders board, I actually have a few trades I am watching plus a trade I am in right now that put in bottoming tails which I used as an indicator for a reversal back higher.

Put together with the multiple indicators I've referred to over the past few weeks and the 4 year moving average, I'm even more confident of my reversal prognosis.

Remember, lots of times stocks will move on no news like that penny stock oil company I referred to ECCE who has actually sold ZERO barrels of oil this year and somehow got a huge rally. Then, it might move on a delayed reaction, which is what probably happened with Treaty last summer.

[IMG]http://i.imgur.com/wRO3I.png[/IMG]