"Choice
is change."
-- Christina Nikolov
Tooth Decay
by
Christina Nikolov, Founder ChartWatchCentral
Stock/Ticker: BIOLASE Technology (BLTI)
Date: March 21, 2003
Opinion: Bearish
Current Price: $8.15
Target Price: $6.24, then possibly $5.40
Commentary:
When BIOLASE Technology (BLTI) peaked at $8.50 on March 19th, the shares were at their highest level in almost 10 years. (chart #3) It's hard to believe that just over five months ago, BLTI set a new 52-week low of $3.50. As you can see, most of the recent upswing was contained within the past two months, as BLTI soared 67% since January 21st. (chart #1)Since prices can swing dramatically within the span of a few months, as evidenced by the October to March rebound, you might want to check out a rising wedge which emerged over the past seven weeks. BLTI has been continuing to drift higher, with higher highs and higher lows as the trading range narrows.
For those of you who follow candlestick charting, an engulfing bear formed on Friday, after a long uptrend. An engulfing bear is a pattern consisting of an opening price which is higher than both the opening and closing prices for the prior day. At the same time, the closing price for that same day is below both the opening and closing price for the previous day.
Our downside projection for BLTI is $6.24, with the potential for a more pronounced decline to $5.40. On the upside, we see potential resistance at two levels - the black dotted line connecting the recent peaks, and the upper trendline of the wedge formation. (chart #2)
Since there are no options to trade, the only way to profit from a decline would be to short the shares.
Chart(s):
#1) BIOLASE Tech. (BLTI) - Six Month Daily Chart
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#2) BIOLASE Tech. (BLTI) - Two Month Daily Chart
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#3) BIOLASE Tech. (BLTI) - Ten Year Monthly Chart
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