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Tangiers Petroleum stock (LSE:TPET) has dropped like a stone as a result of a sudden weakness in the market. The downward break happened with a huge gap that violated recalcitrant demand zones that would normally be extremely difficult to violate with normal price actions.
In the chart, the 4 EMAs that are used have periods 10, 20, 50 and 200 each. The color that stands for each EMA is shown at the top left part of the chart. In June 2014, the 4 EMAs supported the price in a bullish journey, but the significant weakness that started in the same month has resulted in a strong southward backtracking that finally culminated in the latest gap down. The EMAs have started sloping downwards: the movement of the price below the EMA 200 signifies a Death Cross. Long trades are currently not sensible in this market.
While a bounce in the market could be correctly anticipated, it may be short-lived when it happens. The price may thus go further downwards to reach the demand zone at 8.00.
This forecast is ended by the quote below:
“I have very little emotional involvement with my losing trades. I know that my style of trading will always be having losers, but a very good expectancy… Losers literally are a cost of doing business and unavoidable. Managing the damage is the key. My style of trading is to take small losses and hold for big winning trades.” – Larry Tentarelli
Learn from the Generals of the Markets: Market Generals
