With the uptrend line broken, a new downtrend established, overhead resistance along the 50 day moving average, and thinning volume I don’t think its a great time to get in.
You asked if you should average down and as a general rule I don’t recommend it. Why add to a losing position?
Eventually all its efforts will result in a boost in production and better than expected financial results but that day is still in next year country.
The downtrend line is now in place and none of the signal generators are suggesting a shift in momentum towards buying.
What concerns me is that the MACD looks to be turning down indicating that for the moment at least that we can expect selling to come into the picture.
The analyst you mentioned has obviously accepted the company’s valuation model while the market is maintaining the existing valuation model for electrical power transmission lines.
The gap down in November of 2010 on the release of Q3 results that missed forecast was the first signal to get out of Dodge.
