FBU Chart.

[winner69]

If you're still holding you should be topping up once this trend reverses. If you thinking of bailing while still holding then you're simply reacting to price rather than fundementals as all the price based bailing indicators fired a while ago.

This from somethign Phaedrus posted on another thread (not his words but some body else's) is quite interesting

The author also has some interesting views on Fundamental Analysis :-
"You may have noticed that there is nothing in this chapter regarding how to perform fundamental analysis of industries, companies within that industry, financial analysis of earnings statements and balance sheets, etc. Perhaps you expected any book on stock picking to include these topics, but Five Minute Investing does not. The simple reason for this is that if the market is saying that a certain company's earnings are expected to grow (evidenced by an accelerating upward stock trend), why should we find reason to dispute what the market is saying? As long as we have a loss-cutting mechanism in place, we do not need to use fundamental analysis to validate what the market already has told us about the future earnings of the company. The opinion of the aggregate marketplace has far more credibility in my eyes than does the opinion of any fundamental analyst, no matter how good. So I will always go with the opinion of the market, as opposed to anyone else's opinion, including my own. To me, anyone who tells me that a stock which is moving up (or down!) shouldn't be moving up (down), has by definition missed something in his analysis.To make my point on the futility of fundamental analysis for the average investor, think of how you would determine if the grass in your lawn was growing quickly. Wouldn't you just measure the grass today, wait a few days, then measure it again and subtract? If you did this and discovered that the grass was growing quickly, would you then go out and conduct a survey of the temperature, rainfall and hours of sunlight per day to validate that the conditions for growing grass are indeed good? Of course not! You would rightly conclude that the conditions for grass growth are good based soley on the fact that the grass is growing. Even if you did cook up some formula to predict grass growth based on environmental conditions, would you trust your formula more than your direct measurement of the grass's actual growth? If your formula said that grass shouldn't be growing and yet it was growing, would you stop mowing your lawn? Again, to do so would be preposterous. You would have to conclude that something is wrong with your formula.Unfortunately, common sense of this sort does not get applied in the stock market by many people. Even though we can directly measure through a stock's price trend what the company's growth prospects must be, there is always someone there to try to make us lose sight of that simple fact by pointing to his "analysis." You can be sure that for every fantasticly bullish trend, there is some analyst somewhere saying why it shouldn't be happening all along the way.The best you can do is to not listen to such opinions, and, again, go back to the market as your one source of advice."

[Hoop]

Sorry, I don't quite understand what you're saying. You're thinking, it's not going to make it down to the 8.40 or so range? It's almost there already. I'm still holding but wondering whether to get out or top up. I think it depends on what it does over the next little while. Will definitely exit if it breaks the LTTL.

Nosoution this chart may help.

Disc: not holding any.......I've been in and out many times since 2009 not hard to see where on this chart . FBU is TA user friendly.. if the grass grows cut it...

[Hoop]

So Hoop. your TA target is the current share price plus the difference between the next two support levels?

Biscuit ...partially right. All formations have mathematical formulae to approximate how the price goes after it breaks out of its pattern. In FBU case its pattern that it broke out of is correctly called a Top Rectangle Pattern but we commoners call it a trading range...it probably got this name because it is very easy to buy and sell within this pattern with confidence.

When the price breaks out of its rectangle pattern an investor who hasn't sold (obviously) now wants to know his chances on how long to hold this share... so first of all the investor works out the minimum target price in FBU case it is 8.55 + (8.55-7.55) = 9.55. Statistically a rectangle pattern breakout reaches its minimum target price 80% of the time so the investor is confident and his/her expectation is high up to this point.

The next thing an investor looks at once this point (9.55) is reached is the possible pullback phenomena. For a busted upward rectangle in a bull market the chances of a pullback to test the top of the old rectangle formation is 64%..so the trader now watches for weakness and sells out so as not to be hurt with the pullback.....we are currently seeing the end? of this pullback with FBU.

OK where to from here at the possible end of this pullback period

This is where you get your statistics table for Top Rectangle upward breakouts within a bull market (now you will understand why I post so much raving on whether an index is in a cyclic bull or bear..eh) Access to the book Encyclopedia of Chart patterns by Thomas N Bulkowski is a share investor/trader must have. For those people without the book can go to Bulkowski's website called The Pattern Site If you click this I have already directed you to the Rectangle formation webpage from there you can get the statistics table.

Note that FBU has only risen about 12% from its breakout. From this statistics table you see that only 20% of the breakouts fail around that level so FBU has an 80% chance that it will bounce back up off its 8.55 support line.
The median rise (50% chance) is 32% up from breakout 8.55 + (8.55 x 0.32) = $11.28
The average rise with pullback included(slightly less than 50% chance) is 8.55 + (8.55 x 0.37) = $11.71

However at these levels (50%) it is a flip of a coin. My personal criteria is for odds better than 70% so my expectations would fade above 8.55 + (8.55 x 0.17) = $10.00.

When I say 70% criteria it means it has reached my personal expectation and I will spend extra time carefully watching for signs of weakness if it goes above this........Remember though these are statistics and failure is always a possibility so I use the standard trend line, R&S lines, looking at possible new formation being created, TA indicators etc.etc and if sell signals appear at any stage I sell or should sell (I occasionally have disciplinary problems )

I mentioned in my last post that FBU is currently user friendly, it has been a textbook example so far. Reading the textbook it says if the regular fall back process is arrested inside the rectangle it is a sign that an upward breakout is imminent ...Hey presto!!!!.. this happened as per textbook script at the beginning of February 2011 (see my chart)

Nosolution and Biscuit Hope this Sunday rave helps

[nosolution]

Great Post. Thanks Hoop!

[nosolution]

Hoop,

How would you decide that the $8.50 support had been properly respected and that SP was on it's way back up? I.e., how would you time your buy back in?

[Scotty020]

Hi Guys,

Any thoughts on FBU at the moment? I'm suprised the share price has come down this far and am wondering if anyone is considering buying at this level?

[percy]

Hi Guys,

Any thoughts on FBU at the moment? I'm suprised the share price has come down this far and am wondering if anyone is considering buying at this level?

I note FBU is in a down trend at present.I would hold off purchasing upturn the trend changes.I would expect one of our great chartists will give us the word when the buy signals fire.I do hold.

[Phaedrus]

For those of you such as Scotty, Biscuit and Nosolution that may be looking to time an entry into FBU, here are some suggestions as to suitable Buy signals.
(1) A break of the current trendline.
(2) A break of the OBV trendline.
(3) The Stochastic oscillator rising above its OverSold threshold.
(4) An end of the current downtrend - ie a new Uptrend, defined as a higher High after a higher Low.

None of these indicators come with a guarantee - all we can do to evaluate their potential worth is to observe how well they have performed in the past. It is unwise to act on the basis of a "buy" signal from any single indicator - what you are looking for is some level of consensus.

You can see that FBU is in a nice steep downtrend and is now technically OverSold. Don't forget though that any price rise sufficient to trigger buy signals is not going far unless it is supported by volume. Translation :- The OBV trend is really important. As a leading indicator it is often the first to fire, but of course to act on that alone is ill-advised. Wait till you see the whites of their eyes before firing.

[Arbitrage]

However would it worth starting to accumulate FBU on the basis that the bottom of the fall is approaching?

Looking at the amount of future work they have stiitched up in Christchurch the fundamentals suggest so.

[Arbitrage]

Do you think it will get to $7.80? That would be interesting.