Follow-Up On Wizard’s Fortescue Story

This story features FORTESCUE LIMITED. For more info SHARE ANALYSIS: FMG

By Rudi Filapek-Vandyck

Things can move quickly in financial markets. One moment the TechWizard is looking for a potential buying opportunity in Fortescue Metals ((FMG)) shares, the next moment he has to reverse his intentions as continued weakness has changed the technical picture.

Following up from his story earlier this morning, the TechWizard now reports it increasingly looks like Fortescue shares will step out of their trading range today, and they will do so on the downside.

This, says the Wizard, could be an indication that a more serious downtrend has started for the shares. Looking at the weekly price chart, the Wizard notes the shares are now touching the bottom Bollinger band.

This now leaves two possible scenarios:

1.the shares hold and will shortly find enough strength to start rising again and look for another attack of the top Bollinger band
2.the Bollinger bands open up and a more serious downtrend is taking place here and now

In case of point one, the Wizard happily refers to his first story earlier today, suggesting current weakness could be an excellent buying opportunity.

In case of point two, however, investors should be expecting more weakness to follow. The Wizard's personal view favours the second scenario.

He points out the next level of technical support is at $3.50. After that follows no-man's land until $2.30.

The TechWizard reports he at present does now own any shares in the company.

The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au

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