Forum Archive Index - March 2004
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[sharechat] RBD Chart.
Allan,
You are showing an unhealthy interest in TA. What's worse is that with
nothing more than a crude cocktail napkin based methodology you have learned to
identify trends. Where will this end?
As you rightly surmise, a close of above $1.25 will mark the beginning of an
uptrend for RBD. Price action broke above a confirmed longterm trendline today,
and I have referred to the price/volume climax of 26/11/03 in previous posts.
As I am sure you know, these commonly mark major turning points.
The chart below also shows a longterm triangular moving average. A triangular
moving average is similar to other moving averages except a different weighting
scheme is used. Exponential and weighted moving averages assign the majority of
the weight to the most recent data. Simple moving averages assign the weight
equally across all the data. With a triangular moving average, the majority of
the weight is assigned to the middle portion of the data. It is simply a
double-smoothed simple moving average. This means that it gives a very smooth
curve relatively unaffected by the "noise" of price fluctuation volatility.
Such an indicator is well suited to longterm investors wanting to participate
in the major part of of a trend without running too much risk of being flicked
out prematurely (or tricked into buying) by transient price spikes. This or any
similar long-term moving average enabled users to ride the 18 month uptrend and
lock in profits, while then keeping them out of this stock as its value more
than halved over the next 18 months. Todays close gave a crossover on this
indicator.
So, have we turned the corner on RBD? Based on the price/volume climax, the
rebound from long-term support, the break of a long-term moving average and a
trendline break, it certainly looks like it, though we need an uptrend - a
close above the previous peak and resistance at $1.25 - as confirmation.
Phaedrus.
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