Did I catch this one? No. Did 3C? Yes.
The first chart is a daily 3C chart of HGSI. 3C is my own indicator that I created for use to track accumulation, distribution or confirmation by way of divergences like most indicators and did so with Worden's software (click the link) Why does it work so well? I'm not sure exactly, but is has elements of a Worden proprietary indicator, TSV included in it's formulation. The first chart is a daily chart, 3C is in orange. First note that the August 2008 highs were not met with a higher high in 3C, thus we had our first negative relative divergence and price proceeded down from there. The lows of March 2009 were met with an impressive positive relative divergence indicating accumulation. Actually accumulation appears to have begun toward the end of Q4 2008. During June of 2008 we not only received confirmation of the move up, but also saw a very impressive leading divergence. As I teach in my class, look for subtleties and on 7/15/2009 we saw a nice bump up in volume. the next day we saw volume increase dramatically, but anyone could have spotted that. On 7/20/2009 HGSI logged an impressive 276% one day gain. Why? I don't know, I didn't look and don't really care. The new highs of August and September did not receive confirmation from 3C and thus we saw a period of more or less lateral consolidation.
Now, if you were carefully observing for the subtle changes that I preach about, you would have noted a relative positive divergence between 10/08/09 and 10/28/09-again, a sign of accumulation.
Jumping to the 15 minute chart and this is why I always advocate using 3C in various timeframes as a quick change in character will usually not show up on a daily chart, at least not like an intraday chart, the 15 minute chart revealed a clear positive relative divergence between 10/22/09 and 10/28/09. By 10/29/09 we had the most bullish reading-a positive leading divergence and shortly thereafter, the 35% jump. Also note the negative divergence at that point that preceded the pullback.
Right now the 1-minute chart is productive, but not yet at a confirmation, but moving in the right direction. Right now HGSI is working through a resistance zone with significant overhead volume from the reaction lows of 2000 and 2001-(former support becomes resistance). This is a stock to keep an eye on, even if it's just for the learning experience. I haven't done so yet, but I'd also say that a peek into the sub-industry group components wouldn't be a horrible idea. As always, feel free to contact me by email anytime or leave a comment below this post.
