Puda Coal Inc (PUDA)

[tatrader11]

"As you said PUDA enters the upper bolly and actually is above it combined with a very good run lately and that is overbought for me."

What the bolly provides is a measure of a stock being over EXTENDED or a short term basis. It shows so called NORMAL trading range. When a stock busts thru a band it is considered over EXTENDED, not over bought.

The stochastics is an indicater that shows over bought, oversold.

So for example one could say today that PUDA is touching over extended as it is hitting the upper bolly band on the daily chart, it is also approaching over bought with the slow line going above 80% today however both slow and fast pointed up so no take profits yet.

HOWEVER IF the stock closes today near present level of 7.63 you will have a spinning top candle (shooting star, gravestone doji) forming right at the bolly band and this is a very clear WARNING the rally has stalled AND is over extended. But it is early and who knows where it will close.