VHC recently had a crash in its stock price on record heavy volume. However the stock has found itself perched right on a key critical support level and creates a potential opportunity.
I am looking for an upward automatic rally from this crash.
VHC has a reasonable size trading float which appears to give it a history of 3 to 4 day consolidations before the upward reactions (this has happened historically as well).
Obviously support must hold here for this setup to be valid.
It is consolidating in a small decending triangle and a break up from this triangle may be first indication that the automatic rally wants to ensue.
The most difficult stocks to buy are the ones where the risk appears to be the highest. The risk definitely appears to be very high after looking at the crash. But the heavy volume capitulation and the horrible news opens the door to a reactionary rally as long as support holds WELL.