Also, the 100 days EMMA has moved above the 200 days EMMA and the two seem to be diverging, indicating a good upward momentum for the stock. 2. Moving Average Convergence Divergence – MAC Both the MAC and the Signal line have mostly stayed above the zero line since April 2009, further complimenting an upward momentum in the stock. Also, the MAC stayed above the signal line for most part of this period, suggesting a bullish trend.
However, MAC has dipped below the signal line over the past 1 5 days, indicating marginal bearishness in the stock, which is more so a reflection of the market position over the past month. 3. Price Rate of Change – ROCK The ROCK has stayed above the zero line since April 09 except for couple of major fluctuations which was caused due to a major decline in the price during the end of Jejune which corrected itself almost immediately (This decline is not captured in the charts). This trend further indicates increasing upward momentum for the stock.
Further, this is no major divergence between the price and ROCK suggesting there may not be any sharp decline in the near future. 4. Relative Strength Index – RSI The RSI saw a sharp rise during Mar-Par 09 and stayed in the 60-70 region through May-June 09 indicating overbuying of the stock. This trend corrected itself towards the later part of June and stayed normal (between 30 and 70) through July except for en major downward spike caused due to the abnormal one day fall in price that was stated previously.
However, there is steady decrease in RSI over later part of July and throw Gag and is approaching 30 suggesting that the stock may be witnessing undervaluation. 5. Parabolic SARA The parabolic SARA indicated strong buy condition (dots place below the price) for the major part of Par and May 09. Since June, there have been regular changes in the buy-sell position indicating volatility in the stock. Latest indication of the parabolic SARA shows a sell position due to falling stock prices though this could be due to the act that the stock may be witnessing undervaluation.
However, this trend may be set for a reversal considering the positive indications by MAC, ROCK, RSI, and the moving averages. 6. Bollixing Bands After remaining wide apart for the major part of Par-May 09 due to the high volatility in the market, the Bollixing bands have been contracting through June-July 09 indicating a reduction in market volatility. Further, the price of the stock seems to be tending towards the lower band further suggesting that the stock is being oversold leading to undervaluation of the stock.
