Forum Archive Index - February 2002

[Phaedrus <Phaedrus@techemail.com>]

Adam,
      You ask "What tell tale technical signals were present a week ago that 
could of provided me with a better understanding on when I should of entered 
the market?"

 A week ago, this stock was already well and truly on the skids. It was in a 
long-term downtrend, had broken a medium-term trendline, and there had been a 
string of very bearish candlestick patterns, including many black Marubozu, and 
an Evening Star formation. There had been four black candles (down days) in a 
row, and of the last ten candles, nine had been black. The single up day had a 
very long upper shadow, caused by keen sellers pushing the price well down from 
the days high. All very, very bearish. In short, this was a stock to stay well 
clear of, at that time. After the labelled Black Marubozu, there was nothing 
that could be construed as remotely positive, even by an optimistic observer.

 I notice an RSI indicator plotted in the chart you attached. This oscillator 
gives buy signals when it climbs above the "oversold" level (the lower red line 
on your chart). There have been no RSI buy signals since September of last 
year. 

 I have plotted some buy and sell signals, as indicated by simple trendline 
breaks. One of the trades would have been very profitable indeed, and the other 
would have made a small profit. Acting on candlestick patterns would have 
improved both of these trades.

 This is not a stock that I know, but if the fundamentals are as good as you 
say, it would be well worth buying when it eventually begins to trend up.
             Regards,
                     Phaedrus.
      

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