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Soapy Bubbles

05/16/11 1:45 AM

#30304 RE: zzbirdman #30298

Heya ZZ. OK, here's the basic chart.



The thing on the one is the watch acc-dist (AD) line. As you saw, the stock ran hard once the slope went from downward (negative) to upward (positive). You had solid buying right into the 200MA, some flipping out since traders often exit at or right under the 200MA and then a weird long legged doji as the last candle.

Now what we need to see is what made that last candle.

First off, that's an odd candle. A few features I notice:
1. Close was above the UBB on an RSI(14)<70 -- usually the UBB is a support if and only if the RSI is over 70. Also the last candle showed that nicely since the low really took a dive back into the BBs -- signalling weakness despite accumulation holding up the stock. It must have been one hell of a battle on L2 that day.

2. The candle occurred on a day where the volume was decreasing. That's a synthesis of reduction in interest coupled to the remaining interest being bullish despite people flipping out. So, there are some stubborn people out there and that made the doji.

3. The RSI isn't strong enough to help w/ maintaining that candle unless someone w/ A LOT of cash shows up.

4. That candle seems a lot like a hangman. But it also filled the gap from the initial pop. Could be manipulated...

The last two candles (a hangman and odd doji) shows a psychology shift from bullish to bullish but slightly undecided on whether to push now or after the first pullback.

I'd follow the rule that if RSI(14)<70 and Close>UBB, then sell. If I were trading it, I could always get back in later.

Soapy Bubbles

05/16/11 8:07 PM

#30330 RE: zzbirdman #30298

Check the UBB - closed inside.