Thanks! I wish I had a way to embed my chart from ScottradeElite (does anyone know how to do this?). I'm looking at a 14 day chart of SCRC along with volume, MA(10), MA(25), A/D, RSI(14), and I drew vertical lines at points where the MAs crossover. Typically these crossovers act as additional indication of reversals when the RSI is in the overbought (>70) and oversold (<30) ranges. The first thing I notice is that the RSI has been channeled between the 30 and 70 range but with a significant portion lying below the 50 (oversold). There is a strong correlation between the MAs and the RSI in this chart: when the MA(25)>MA(10) we have RSI<50 and MA(10)>MA(25) we have RSI>50. Therefore, a crossover of the MA(25) over the MA(10) would (at least to me) be a slight bullish indication as it seems to be correlated to oversold conditions. The opposite scenario would correlate to a bearish indication. This demonstrates that crossovers of the MAs may indicate trend reversals in the RSI and SP. Now, as I stated in my previous post, the A/D is best paired with a momentum oscillator of some type, in case the RSI. What I like about the current set up (and I've been outspoken the last few days about my opinion on SCRC as a true long term investment, which is entirely different in its analysis) is that the A/D is running opposite the SP which is an indication of a reversal. Moreover, due to the channeled nature of the RSI, a strong breakout of the RSI through the lower threshold (<30)- especially if it does so with force - would be a bullish indication. In other words, the SP is going down, the A/D is going up, and for a bullish indication we want the RSI to break through the 30 mark. If the MA(25) moves over the MA(10) as well, then the RSI move would have addition support. Now, this is all a mouth full and seemingly pointless unless we look at it in the context of SCRCs future. I feel that due to the dilution, we will see the RSI trend downward with more severity than in the previous weeks (an the SP will surely be down). I also feel that the quick drop in SP will cause the MA(10) to move below the MA(25) (known as a dead cross)- this will support the RSI move. To me, these conditions cause a void above the SP so to speak - the conditions that indicate a "bounce play". The question is then where is the floor? Sorry for the wordy post - hope it makes sense.
