Boston, MA 10/04/2013 (wallstreetpr) – LDK Solar Co., Ltd (ADR) (NYSE:LDK) (Closed: $1.69, Down: 3.43%) opened flat to positive on Thursday but after a failed attempt to rally, succumbed to the bearish momentum and ended deep in the red. The price action produced a long range candle with shadows on both sides but remained in the huge range created over Monday & Tuesday candles. So a decisive move can only come beyond the range set by those two candles – either above $2.16, the Tuesday high or below $1.49, the Monday low. The volume kept high at 6 million against an average of 2.5 million, on par with Wednesday but far lower than the volume on Monday or Tuesday.
The stock had made its debut in June 2007, the last phase of the bull market. It rallied hard for a while to reach $76.75 from the low of $22.27 in just 4 months but this irrational exuberance was corrected totally in the vicious bear market of 2008. It took only about a year to take the stock to the cleaners or to a low of $3.75, far below the 2007 low. The fall didn’t end there and after a brief bear rally to $14.97 by early 2011, it dropped to $0.71 by late 2012. The last part of the fall from the 2012 top of $6.92 is clearly divided into 3 legs. The B wave top of that fall is at $2.36 and currently the upper boundary of the supply zone the stock must cross and sustain above for the minimum hope for any reversal.
The price is contracting and creating a triangular pattern, but all of the 4 attempts in this year have failed in the zone of $2.06 – $2.36. A failure to break this zone could drag the price down to $1.45, below which the support zone of $0.93 – $1.10 could be tested too.
