The tip-off that something was amiss was the big increase in volatility. Prices fell from the mid-July peak of 11 dollars per share down to 6 dollars a share in a little over two weeks.

The red trending bar that then started to trace in early August was very ill timed as it appeared at the absolute low of this downward price break. Bars that are this ill-timed bespeak oscillation and not trending. Volatility also picked up significantly. If you eyeball the dark green bar of early July, you'll see that it was born in a period of very low volatility. The price bars in early July are very tight and the price action did not include a lot of intraday swings. This contrasts sharply to the picture we have of this stock in mid-August.

This illustrates a fairly common pattern of price action in smaller cap issues. The first wave up starts on low volatility and decent volume. Volume picks up and drives the move forward. Finally, the stock plummets (and the green trending bar is yanked down). Volatility increases as prices drop steeply. In such a steep price drop, it is best to stand aside as price action becomes unpredictable and classical technical analysis techniques become less useful. In this case, a price spike up caused a green trending bar to be born.