Stock Chart Analysis VG

Posted by downtowntrader | 5/16/2007 04:56:00 PM | 0 comments »

Stock Chart Analysis VG

Vonage Holdings Corp. (Public, NYSE:VG)

Is this stock worth $0? Anytime this company is mentioned I get a lot of negative comments about how they don't own anything or how bad management is, etc. I can't find anyone with anything good to say about this stock. And that is one of the reasons I like it. VG has dropped from a peak of $17 to sub $3. It could keep going to be honest, but the chart is flashing hints of accumulation here and a short squeeze may be coming soon.

VG has been in a very clear downtrend until some recent consolidation in the $3 area. There has been a decent increase in volume signaling capitulation, accumulation, or both. There are also nice divergences in MACD and RSI. If you look closely, you can also trace out a small reverse head and shoulders pattern with a neckline near $3.75. VG could very well fall under this consolidation and keep dropping, but I would wager on a reversal, even if only a dead cat bounce on it.

Good Trading,