A month on from my last update on AVH it does seem to be showing sign of a pulse at last! After making new lows (although only marginally) the stock did test my resolve to keep holding. This perseverance looks like it may be going to pay off as the recent move up in price suggests a short term further rise to $7.77. One charting positive of the drift lower is that it has allowed the stock has made a formal downtrend on the weekly chart. Because the Covid fall was so steep and didn’t see lower prices over a 12 week period, many stocks remained in a technical uptrend (although I see this as a bit of an aberration). Anyway, it is now possible to draw a technical downtrend line on AVH and price (if it doesn’t fall back this week) may show 2 consecutive weekly closes above a downtrend (a technical buy signal). All we need us a higher low followed by a higher high on the weekly and a new formal uptrend – and AVH will have ticked all the boxes.

AVH 1Sept2020

27 July 2020

AVH is a sore point with me as it just keeps letting me down - and its one of those situations where my analysis wasn't correct and I should have sold before now (goes to prove nobody is perfect!). 

Price broke below a $6.50 support level which also saw a new low - and that is really bad news that predict high probability of further falls. I'm holding off pushing the sell button because it has moved back above resistance (and sometimes resistance can be a band rather than just a thin line). It's also made a falling flag pattern which will be confirmed if price moves above last weeks high. Assuming the channel is for real then I'd say price has a good chance of bouncing off the lower boundary and returning to the top boundary around $8.75. There it could fall back before going higher - or it could break through and make my day - although I think I'd be tempted to cut my losses and sell around $8.75. If it actually got above $9.11 that would be a new weekly high and if it then retraced a bit to make a higher low I'd have to think that was a strong sign recovery was under way.One last reason I think the bottom could be in, there is a pretty reliable targeting technique I applied before the recent low was in. That's shown by the green horizontal line and that exactly where price fell to. Unfortunately it just tells me that was where price would fall to - not that it might not fall further. As that level $6.05 also coincided with the low price and the channel boundary it suggests to me that is a strong level of support. I can usually get some clues about price direction from Elliott Wave Theory but in AVH's case it isn't clear. My (optimistic) interpretation is that price may have reached the bottom of Wave 4 and if so it could be expected to rise from its present price to above $17 in time. Last but not least Time Theory suggest price should rise from the low last week.

AVH 27 Jul 2020


Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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