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CTIX Daily Chart 2-07-13

|Includes: Innovation Pharmaceuticals Inc. (IPIX)

Not much remarkable about the chart, as the CTIX price action has remained inside the high #2 and the low of #3. I had some requests for an updated chart so let's look at this minor inside action a bit.

We saw a test of the higher yellow diagonal line of the coil I had drawn, followed by a break below the lower yellow diagonal coil line and the former support at $1.89 which has now morphed into resistance with 4 days closing below that level.

In general, when there is a break below a coil and a break below support we expect a fairly wide range move and a test of a lower support level; those are minor support at $1.65 and Key Support at $1.50.

So far CTIX has fallen short of that, and is instead toying with the new resistance line at $1.89, so I don't call this a 'sell-off' or a 'decline', so far just a 'meander'.

Note also the red arrow on the volume on the W7 red bar, followed by declining volume each additional day. This suggests selling pressure has eased up, but also we see low volume on the buying, so essentially indecision.

On balance I would expect a re-test of one of the lower support levels before we see a test of the high. But note I mostly only look at the chart as it is now and how it is trending, I don't predictions and the future is determined by the selling and buying which has yet to occur. Thus I make 'on-balance' opinions of what I expect as more likely in the short-term, always with an alternative scenario.

Note we also have 5 days closing below the 20 day MA (purple line) This has not occurred since $1

Scroll down for a second chart below looking at the last time CTIX had closing days below the 20 MA.

(Click chart for full-size)

Below we take a closer look at the last rally pullback which had closing days below the 20 day MA (purple line). CTIX also entered a meandering consolidation period after that rally.

Just like the current period, it was preceded by a sharp rally up. Then a pull-back, and then CTIX ran flat above a support line. Support then broke and became resistance and CTIX started to close below the 20MA

Note the two red arrows where the new resistance level at $1 was tested, followed by the expected test of lower support at .78 cents.

There was then a second test of resistance at $1, with a couple more days closing below the 20 MA, at which point resistance was broken, followed by a test of the next resistance line at $1.10, which failed and we had more days trading below $1. This level then morphed back into support. Bit of a battle. But lower support at .78 was tested as is typical.

Notice also that the yellow trend line was established during this period. Going back to the first daily chart above, we should keep in mind that the chart remains in longer term rally mode all the way down to that yellow trend-line which is now at $1.27, and still bullish all the way to support at $1.

But at this time I don't expect a test of either of these lower levels, as there is Key Support at $1.50 and the 50 MA is now above key support. Alternatively a move higher will put CTIX right back into the coil, and possibly a test of high #2.

I will do an updated chart as the daily price action becomes clearer. Right now it is in a minor, 'inside' meandering pattern. Basically a morph from the prior rally mode from my prior charts to a consolidation mode which can have a more complex series of waves.

(Click Chart for full-size)

Disclosure: I am long CTIX.OB.

Additional disclosure: This post represents my opinion, is posted for educational purposes only, and is not a recommendation to buy or sell securities.