F&N Dragonfly doji suggests possible near-term correction

- F&N is likely experiencing rally fatigue, which could spell a correction in the days ahead, following the formation of a bearish dragonfly doji candlestick just shy of the 1.5-year downtrend resistance line.

- As both the RSI and Stochastic indicators have recently risen into their respectively overbought regions, they further reinforce our view that the recent rally has been overdone and the stock is likely to retrace in the near term to a more gradual and sustainable recovery along its 1.5-month uptrend line.

- We expect the correction to find an initial support at $2.70 (100-day MA and 1.5-month uptrend line), breaking which, we could see another key support at $2.40 (50-day MA and resistance-turned-support level in Mid Apr ‘09)

- Immediate resistance is pegged at $3.15 (200-day MA), ahead of $3.40 (minor peaks in Nov ’08 and Jan ‘09)

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