NewStream Energy Technologies Group Inc (NSGP)

[trader53]

Explaining Money Flow......

Accumulation Indications
The Money Flow oscillator generates bullish signals by indicating that a security is under accumulation. There are three factors that determine if a security is under accumulation. They also determine the strength of the accumulation.

The first and most obvious factor is whether the Money Flow value is greater than zero? It is an indication of buying pressure and accumulation when the indicator is positive.

The second factor is the duration of the reading, how long the oscillator has been positive. The longer the oscillator remains above zero, the more evidence there is that the security is under sustained accumulation. Extended periods of accumulation or buying pressure are bullish, and they indicate that sentiment towards the security remains positive.

The third factor is the intensity of the oscillator. Not only should the oscillator remain above zero, but it should also be able to increase and attain a certain level. The more positive the reading is, the more evidence of buying pressure and accumulation. This is usually a judgment call, based on prior levels for the oscillator, but a move above .10 would be significant enough to warrant a bullish signal. A reading above .25 would be an indication of strong buying pressure. You should consider prior levels of the indicator to be sure.

Example:
http://stockcharts.com/help/data/media/chart_school/technical_indicators_and_overlays/chaikin_money_flow_cmf/sc.png

The stock formed a Double Bottom in August and September while Money Flow formed a rather large "positive divergence". This divergence was not a signal, but would have served as an alert that the selling pressure was decreasing.


CCTC: Selling pressure is decreasing !!! "Positive Divergence".
http://stockcharts.com/h-sc/ui?s=CCTC&p=D&yr=0&mn=6&dy=0&id=p03196946874