TUNA Revisited

Last Thursday, TUNA break from the price channel support (LINE 1). If you are strict in adhering with your risk reward strategy, you have exit your position when the line was broken.

I have revisited TUNA to see where the next support is for that will give me the re-entry level. Although the price is still within the upward channel in the last week of Feb 2008, a consolidation box have started to form already. The box floor is at 1.84 and ceiling is at 2.02. Buying at 1.88 will give you a risk reward ratio of 0.285 (approximately 1:4) which is even below our recommended 0.33.

What if you have not cutloss when the channel support line was broken, is it still recommended to cutloss now? No because the price could be on its way up (taking the queue from the bounce at 1.84 and strong buying at 1.86) and selling at this point will just result to getting whipsawed. I suggest that you just hold and cutloss if the floor of the box is broken.

Take note that 50MA is already kissing the 200MA and is bound to cross over on April 14, 2008 or the next day. After that crossing, I have a feeling that the price will attempt to get back in the price channel and then try to take out the ceiling of the box.

Line 1 which is previously our support has now reversed its role to resistance. It is upward bias thus the level of resistance it gives changes every trading day. To give you guidance on where this line 1 is crossing, I have included a daily update of its level at the sidebar.