My expectations that prices will bounce by this week hasn't materialized but my hopes that prices will dip to its 50 day moving average has come true. (See Breadtalk Buying Opportunity Soon for initial analysis.) Not only has it dipped, yesterday prices broke through the 50dma and continued heading south today. Mixed feelings about this.
From the looks of the chart, there are a couple of positives and negatives. Let me list them.
Positives:
1) Prices seem to be following an uptrend channel.
2) Price closed at support of $0.61.
3) RSI, Stochastics and MFI are in oversold regions
4) ADX reveals that the selling is not a strong trend currently.
5) Volume is low despite the selling.
Negatives:
1) Prices had trouble breaking resistance of $0.645 resulting in the dip.
2) 14dma looks to be heading to form a dead cross with 50dma by the end of the week.
3) OBV is has turned down.
4) 4 consecutive black candle days.
If selling continues, I'm expecting a dead cross to form between the 14dma & 50dma. This has a danger of plunging prices down even further thereby breaking the uptrend channel and compromsing support at $0.61 which could send prices down to the rising 200dma as well as previous resistance at $0.59. As stated, ADX doesn't show any trend forming yet despite the selling continuing as evidenced from the 4 black candle days. This gives hope that there could be a rebound especially since RSI & Stochastics indicate stocks are oversold at the moment. However with OBV turning down, and no upturn from RSI and Stochastics this gives an uncertain picture as to when the rebound might take place, if it takes place.
Shall wait a couple more days for clearer signals before deciding the course of action to take.
Good luck peeps!
~K
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