Gigamedia ltd (GIGM): Technical Analysis
Gigamedia has been on a roll for the past year. I think it has had a good run and its time for a pullback. My thinking is based on the following charts. First, the long term chart (2000-2007). It has reached the level last seen during the tech bubble burst. Price has memory and this is one reason for a strong resistance here. Remember, I dont analyze stocks based on fundamentals..this is pure technical analysis.
The next chart is a short term chart (1 yr). It shows a nice uptrend with higher highs and higher lows but a closer look at the MACD and OBV paints a cautionary picture. Notice the MACD divergence. While the price is making new highs the OBV is not.
I would stay away from GIGM for now and may be consider shorting if the uptrend line is broken.
For those who are Vehemently bullish on GIGM, please visit one of my earlier article on OVTI that sounded a similar alarm but was brushed aside (See comments section). OVTI is yet to recover.
Labels: chart analysis, GIGM
posted by Ravi Sankaran at 8:34 AM
1 Comments:
When GIGM earns between .80 and a dollar this year, nobody is going to care what your charts indicate. It's time for you to open those green blinds and take a look outside. In addition, there are almost 4 million shares already shorted (i.e. 8% of the outstanding shares). I can't wait until they have to cover.
May 11, 2007 5:00 AM
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