QLGC:"If u have a stock showing a bullish divergence between ADX and price ie where the price is vacillating between the lower bollinger and the 20 EMA but the ADX is showing a very strong uptrend, would u buy on dips here or simply go to another stock."
First of all, I don't use BB at all and not ADX in that manner, so if you don't mind, I'll just draw a chart for you here, using my techniques.
ispeculator.com (might be a big low to load here, since we are having some problems with the site temporarily)
Here on the daily chart, I have connected the series of higher lows since May...and at the beginning of October, this trendline was broken decisively.
Over the past few days, it's bounced and is now meeting resistance from three points: the 20-day EMA overhead at 82, the 50-day EMA at 91 and also the backside of the broken trendline at around 91. IF this is a failing bounce, THEN the sellers will take it down with two targets: first, a test of the low made on October 11 at 66 1/2, and then, all the points that connect the blue line will be targets, all the way down to the May low.
Note ADX is now rising and at 37, it means that this is a confirmed directional move to the downside. The downtick in ADX says "bounce in downtrend".
Teresa |
