TWR chart looking good atm
Tower broke out of it's trading range late last week and smart money came in.
The fasinating thing about TWR is its strong historical respect to it's Support and Resistance (S&R) levels which gives some comfort to investors when it comes to enter and exit.
So...with this S&R history, it comes with no surprise that eventually a trading range formation would happen.
This trading range is called a completed Rectangle bottom formation which after a break out has only average predictability depending on many variables. In TWR's case a gap breakout increases the chance to reach its target price of 1.75 to 85%..however the pre-formation spike is a negative and lowers that 85% chance, and especially that 1.65 historic resistance level (my biggest worry) but the NZX index being in a cyclic bull market increases that chance up again .....so conservatively a chance of 65-70+% to reach 1.75. (****Bulkowski 85% chance to reach 1.72 for basic KISS method)
Pull backs occur 53% of the time so there's a slightly better than even chance that on its way to meet its 1.75 investor target price**** the price will fail the first time to breach 1.65 resistance and fall back (pull back) to test its new 1.55 support...this gives the late (tardy) TA investor (me!!) a second chance (53%) to enter.
Thats the chart formation theory side of things....now we still and wait for the practical side to play out :mellow:.
Note that the investor target price 1.75 is just a mathematical thing usually a 70+% chance of reaching that area for rectangles in a bull market... sometimes there is no resistance (slight resistance in TWR's case) in that area so it should not be seen as a magical barrier....often it keeps going up past the target price.... or 30% of the time it won't make it.
**** 1.72 target price using BUlkowski's latest formula ...(see Bulkowski's the pattern site)
http://i458.photobucket.com/albums/q...WR02032012.png