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Tuesday, April 05, 2011 4:47:00 PM
Not too shabby today. 2 key TA events occurred on the daily chart that are worth noting.
1) The close at .13 gave us a green bullish hammer (a close at .131 would've given us an even more bullish dragonfly doji). This is a moderately reliable indicator of a reversal. Sometimes it might take a few hammers to test the low before a reversal occurs and sometimes a hammer is rejected and the price continues to trade lower in a downtrend. That is why it is important to consider the bullish hammer with other factors on the chart that are indicating a potential bottom is at hand.
2) The Full Stochastics (STO) has been trading below 20 which is indicative of an oversold condition. Today there was a bullish crossover within the oversold territory which is also used to signal a reversal as I explained in my post from yesterday identifying this set-up.
I was a buyer today supporting the .126 bid based on my personal analysis that we are in a bottoming out phase and the chart is offering pretty good signals and confirmations of a reversal. I will buy more strongly tomorrow if there is another green candle with increasing volume in which the STO rises above 20 as that will further and more confidently indicate to me that we are reversing towards a bullish sentiment on the stock.
1) The close at .13 gave us a green bullish hammer (a close at .131 would've given us an even more bullish dragonfly doji). This is a moderately reliable indicator of a reversal. Sometimes it might take a few hammers to test the low before a reversal occurs and sometimes a hammer is rejected and the price continues to trade lower in a downtrend. That is why it is important to consider the bullish hammer with other factors on the chart that are indicating a potential bottom is at hand.
2) The Full Stochastics (STO) has been trading below 20 which is indicative of an oversold condition. Today there was a bullish crossover within the oversold territory which is also used to signal a reversal as I explained in my post from yesterday identifying this set-up.
I was a buyer today supporting the .126 bid based on my personal analysis that we are in a bottoming out phase and the chart is offering pretty good signals and confirmations of a reversal. I will buy more strongly tomorrow if there is another green candle with increasing volume in which the STO rises above 20 as that will further and more confidently indicate to me that we are reversing towards a bullish sentiment on the stock.
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