Talk about volatility.
| phase | pfe | pps | trend | ||
|---|---|---|---|---|---|
| EGPT |
Now EGPT generally has a very shallow market. A good day is 40,000 shares, and often it trades at less than 10,000. So it's fairly amazing to see 1.2 million shares traded on Friday, Jan. 28. Clearly, there's a lot of speculative money that's betting on a positive outcome to the protests again the regime of Egyptian President Hosni Mubarak.
Egypt -- the country, not the ETF -- has one of the more vibrant economies among the Arab states, but it's no Brazil, China or South Korea.
Its top holdings are in the construction, telcom and banking sectors -- infrastructure plays rather than export -- plus tourism, a fickle friend when the world economy tanks.
Generally, the stock has traded sideways, between the $19 and $20.50 range, with the occasional breakout along the way, since last September.
The stock was in neutral phase according to the 55-day-entry/20-day-exit price channel analysis. The average directional index (adx) had just turned up on a strong intra-day rise two trading days before the crash, suggesting some slight volatility lay ahead, to the upside.
It wasn't to be. The price collapse sent the adx soaring, of course, but all that fine volatility was to the downside.
Here's what the price-channel table looked like on Monday:
| sym | bday | blevel | stop | adx ≥40? | 2-day? |
|---|---|---|---|---|---|
| EGPT | jan25 | $18.69 | $18.85 | x |
However, the adx tipped down today while above 40, which an automatic close signal for any position. So EGPT, by the book, is back in neutrality.
It's hard to discern any meaningful support and resistance levels, given the violence of the price swing.
Reversal Levels
- $20.63, +12.9% (pre-crash swing high)
- $19.80, +8.4% (crash-day high)
- $18.27 --- You are here.
- $15.90, -13.0% (crash swing low)
The slow-trade chart doesn't really show much of a history -- EGPT first traded in February last year -- and the price has swung between April 2010's high of $22.42 and January's low of $15.90.
Monthly chart
| phase | pfe | pps | trend | ||
|---|---|---|---|---|---|
| EGPT |
This is not a stock that I would trade within my existing systems. The normal liquidity is awfully small. It's not optionable, which limits my strategies. Its price at this juncture depends largely upon the will of a few generals and a large body of middle- and workking-class activists.
Not a wonderful set of circumstances for meaningful technical analysis.
But, as a wild and crazy crapshoot play? Speaking for my own account: Sure, why not. If I limit my exposure so I don't weep over any loss, then its fine. The important thing is to walk into the trade with eyes wide open to the bad outcomes as well as the good.
Table Abbreviations:
- pfe - Location of the polarized fractal efficiency line.
- pps - Person's Proprietary Signal mode.
- trend - Trend of the polarized fractal efficiency line.
Key to the PPS/PFE tables
| column | color | meaning |
|---|---|---|
| phase | bull phase | |
| bear phase | ||
| pfe | +100 and above | |
| +50 to below 100 | ||
| 0 to below +50 | ||
| below 0 to above -50 | ||
| -50 to above -100 | ||
| below -100 | ||
| pps | bull confirmation | |
| bear confirmation | ||
| trend | uptrend | |
| no trend | ||
| downtrend |
More on the analysis
Read a detailed explanation of the analytical tools and how they’re used, including trading rules.
Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
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