Allco-reit

I have a friend who holds Allco-reit stocks and he alerted me to this stock today.

We discussed this and it was very interesting because he knows a lot about the stock's fundamentals.

From the chart we can see that there is a descending right angle triangle pattern. Today the stock price broke out of the support of 0.775. It is currently at the time of this post in the HCR of 0.72-0.76

What will happen?

We were thinking about this and initially I contemplated buying this at 0.74 as the fundamentals are good despite recent news. But I looked at the charts and they tell the truth.

In any case I think that we might see a double bottom formation pattern on this one over the next day and early next week perhaps.

The support right now is at 0.72 (lower end of the HCR). After it gives way it might be a shorting opportunity all the way down to 0.68-0.645

A double bottom will then form and we all know the confirmation level is for the stock to break 0.87 and then the measured target would be 1.09 (but note the HCRs beyond 0.87 which are not shown on the chart I posted above)

After soem reading I also realised that there is a formation called the "busted move" pattern where the descending right angle triangle has a breakout downwards only to recover and then break the downsloping side of the triangle. And this usually results in a very powerful move up!

Statistically downward breakouts happen 64% of the time. The rise is on average 47% after a busted move!

So which will it be?

I'm betting on a double bottom move. I'll probably buy in at 0.645-0.68 and ride this up. Let's see.....