Short Term Trading Member Forum

[techcharter]

GASO E-waves

Since December 2008 GASO has been in a bear market rally.

Wave A ended in June 2009. Note how at the beginning of the wave
(january, february, march 2009) the advance was choppy. It wasn't until late in the wave (may and june 2009) that trend channels narrowed significantly and rallies made greater advances.

Wave B probably ended in September 2009. Wave B's only rally also had a narrow trend channel, consistent with the larger wave direction.

Wave C is a complex advance. The theme of narrow channel rallies happened 2 more times (october and december 2009). The latest rally since february 2010 breaks the pattern of narrow channel advances. This one is choppy, with overlapping subwaves. There is most likely an ending diagonal unfolding.

Just as the choppiness at the beginning of Wave A indicated uncertainty a bear market rally was underway, the choppiness is indicating uncertainty the bear market rally will continue. The RSI is making a negative divergence with the price of GASO. As GASO makes higher highs, the RSI is making lower highs, indicating the rally is losing strength. MACD is rolling over, a sell signal. Stochastics have been over bought, gave a false sell signal earlier this month, but should give a reliable sell signal soon. I expect a longterm top in the near term. Ignore the hype in the media about rising gas prices, which will be a great contrarian indicator.

http://stockcharts.com/h-sc/ui?s=$GASO&p=D&yr=1&mn=6&dy=0&id=p58522119373