Weekly chart shows that Esprit Holdings had been in a down trend channel since early 2010.
It has been in a down trend channel for about 2 years.
Price has just penetrated the down trend channel resistance.
The last 6 months has seen heavy volume with little weekly price change; this is evidence of accumulation that was going on.
13w EMA and weekly MACD-Histogram are both sloping up, so weekly Impulse only allows to go long or stand aside; shorting is not allowed.
GMMA long-term group now expanding upwards.
GMMA short-term group compressed and had a rapid bounce, and now moving in a parallel fashion.
GMMA short-term group is well separated from the long-term group, indicating a stable trend.
13d EMA and daily MACD-Histogram are both sloping up, so daily Impulse only allows to go long or stand aside; shorting is not allowed.
However, there is a bearish divergence seen - Esprit Holdings is making new highs but the MACD-Histogram and Smoothed RSI are not.
The price may retrace back to test the previous resistance now turned support line.
This is a long-term trade, on the basis of a breakout from the down trend and getting in at the start of the emerging trend and riding it all the way until the evidence shows that it has ended.
First profit target is at $28.00, second profit target is at $36.00.
Cut loss at $13.72 - This is the low of the most recent Bullish Marubozu on 23/02/2012.
If this is really a breakout and change in trend, then the price should not drop below this strong bullish candle where the bulls came in with heavy volume.
Outcome:
5 Mar: Opened LONG at $19.00
14 Novl: Closed at $10.66
Reason for closing: Missed the deadline to subscribe to rights issue. Closed the position to avoid share dilution.
Loss $8.34, 43.9%
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