First thing to realize from these charts is that CEPH has reached a very important resistance level. Both, the daily and weekly chart, show very significant fibonacci resistance at around $59-60.
On the weekly, you can see a 1,2,3,4 wave develop. Then there is an A B wave completed and C might be complete. Fibonacci time studies show that the C should be coming to an end this week (or possibly 10/22 week). Also on the weekly, the teal oval shows a head and shoulder with the top at the important fibonacci levels at 59-60.
The daily chart shows the same resistance level and a double bottom along the trend line.
So, this is getting put high on my watchlist. I will wait to see which way the stock breaks out to. If the $60 level resistance is broken, the next resistance level will probably be near $63-64 level. If it breaks lower (below the trendline on the daily chart), I expect it to fall to at least $55-52 level. I am going to use the Stochs as a guide of where the momentum is going. At the moment the daily chart is showing a bearish momentum reversal and the weekly shows that we are reaching overbought levels.
I considered longing a straddle for this stock. Only problem is that we could end up at this resistance for a while and time decay is terrible. So, if we go lower, I think a simple short the stock is probably a good idea because the downside should be fairly limited. If it breaks up, I think a Back Ratio Call should be good.
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