Friday, January 4, 2013

Will Midas Rally In 2013?

 After a massive sell down from the high of $1.17 in April 2010, Midas Holdings has been trading in a range between $0.32 (support) to $0.44 (resistance) since late August 2011. On 2 Jan 2013, Midas once again attempted to break the $0.44 resistance level and it closed the day at $0.445 accompanied with above average volume, which was marginally higher than the previous high. For the mid to long term, the short term moving averages (MA) for 20 days and 40 days is above the 200-day MA, indicating that the long term trend is changing. With the price hitting the 52-week high, this stock has the chance to go further in coming months given its current strength.
As for the bigger picture, we take a closer look at the weekly candlestick chart. The chart shows that the price is forming an Inverse Head and Shoulder pattern, with the current price just at the neckline, waiting for a breakout to happen. According to Wikipedia, an inverse Head and Shoulder pattern often indicates a major bottom of a stock. We see that Midas is one stock that would be “able” to rally after hitting its bottom in 2009.

This post is also published on Shareinv website