PPX 26/1/11

We are all only guessing where price is likely to go in the short term, here's my read of the chart (guess).

looking at a VSA view, currently in a short term down move which affects how I treat differing volume from day to day and compare that with variation in price, from that I attempt to gauge the supply/demand balance and determine the most likely next move.

Monday's wide range down bar on large volume ( highest volume since 23/12) is the most significant bar in the move up from support and therefore has to be treated as dominating the landscape with a bearish tone.

Tuesday saw more selling and what I take from this bar is evidence of increased support for the stock in comparison to a recent instance where price first began to fall and at similar price range if possible. I look on the chart and find 22/9/10(price similar,range of bar similar) and note on that occasion the volume considerably lower yet price moved by about the same amount. This can only happen if there were more buyers willing soak up the available supply. In summarizing this bar,, mood is bearish but evidence of reasonably solid hidden support.

Wednesday, same range as Tuesday with no further decline in price and on increased volume. This bar says to me more sellers entered the market (50% more volume than Tues) yet they were unable to force price lower (same range) so there is even more evidence that the strength of support has increased.

Because supply continues driving price at this point, I remain short the stock and expect a reversal within days once the weak holders who most likely bought on the 19th,20th or 21st are eventually flushed from the stock. I have a covering order at 46c, this represents a short term volatility extreme for a pullback in stocks with a bullish long term outlook. The evidence of hidden strength so far could mean price will not decline to the extent where my order sits, so I am prepared to amend if necessary. I remain long term bullish and happy to continue to follow closely each swing as price progresses towards my eventual 66c target (or beyond if strength remains )

My short position has a stop which would result in a small profit. I need only re-enter a long trade at 54c to equal a buy hold strategy rather than trading the position as I have. The advantage in trading is, it has eliminated the risk to capital if price should continue to fall, and has also given chance to add a greater number of shares for no additional money invested if price does return to uptrend.