Plutonic Power Corp. only for bottom fishers with lots of line.

Oct 29th, 2010 – 1 Comment

Hi Lou, I may be bottom fishing here but I was hoping for your opinion on Plutonic Power Corp. Several times it looks like support has been reached on the downward trend line, only to fail again. Are we there yet or is it best to wait for a double bottom before any buy. Regards […]


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Hi Lou,
I may be bottom fishing here but I was hoping for your opinion on Plutonic Power Corp. Several times it looks like support has been reached on the downward trend line, only to fail again. Are we there yet or is it best to wait for a double bottom before any buy.

Regards

Rob

Hi Rob,

The one thing you have to keep in mind when bottom fishing is to make sure that you have actually reached bottom! Finding new lows with you hard earned money is typically a painful process. Warren Buffett has always advised getting in late and leaving early and just ride a well established uptrend. The charts for Plutonic Power Corp. (PCC  TSX) will give us a better idea of trend, support, and resistance in searching for opportunity.

The three year chart is not what I would call particularly attractive. PCC was range bound with support at $3.00 and resistance at $4.00 over the period May 2009 to May of 2010. After May of this year the stock broke below support at $3.00 and then held on to $2.40 but quickly found new lows at $1.50. PCC has caught a bounce from the rock bottom at $1.50 and is coming out of an oversold situation.

The six month chart  illustrates the weakness in the stock and the inability to break the downtrend. There was an eight day rise that took the stock higher in August of 2010 but it was short lived.

The RSI signalled that the stock was oversold in October which attracted some buying. The MACD appears to be turning higher but notice the resistance at $2.20.

PCC has given bottom fishers lots of head fakes baiting them into the market only to shred their capital. At this point the stock is still fighting the downtrend and if you are thinking of stepping into this name don’t be surprised if you get a shock.

MAKE IT A MASSIVE WEEKEND AND HAPPY CAPITALISM!

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