Asleep at the Wheel

[rich pearl]

RJDG -- a bullish engulfing candle was formed on yesterdays chart. this is a two day pattern wherein a white candle engulfs the previous days red candle, and, when it comes at the at the end of a downtrend, it signals a potentially powerful reversal as it represents a capitulation bottom.

as always, confirmation is needed before jumping in, and this is generally seen when the next candle has a close higher than that of the engulfing bullish pattern

looking at todays small, tightly compacted white candle, i take note that it a) traded all day in the upper quadrant of yesterdays white candle, and b) bounced off the support line at the 200ma.

as for the indicators on the chart, there's been a positive divergence on the macd -- an absolute abating of the negative momentum -- and both the williams and sto's have come out of oversold territory. while this is not enough for an absolute confirmation of the reversal, its a favorable portent of what's coming.

on a break of the resistance at .014, this should test the 50ma around .017. and, should that happen, a trade above .0175 offers a parabolic buy signal. an indicator to watch here is the CCI. when it gets over 100 this will in running mode.

of course, other chartists may disagree with nearly everything i wrote, and keep in mind i didn't expect this to drop this far under the 50ma, so play accrdingly.

that said, i think this is getting ready. i suspect a run towards .02 - .024 is in the offing.

best to ALL

rich