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Strategies & Market Trends : Technical Analysis- Indicators & Systems
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To: TechTrader42 who wrote (1582)6/17/1997 11:34:00 AM
From: Tom Gibbs   of 3325
 
Brook(E(lise)); Thought I'd nose in on your exchange with David re: the T chart. It looked overheated to me. The stock price is higher than the peak of 28 May yet the MACD 8-17-9 has reached a level that is slightly lower than the level of 28 May. That divergence spells weakness for this level at this time to me. The volume level is not as enthusiastic as it was around late May either. My Slow Stochastic 14 has the same divergence and doesn't look so hot either. RSI - same thing. While the long term may be better this time to me doesn't look like the best entry point. The Brad CCI and MACD 5-35-4 show double tops while the stock has gone higher (again a slight divergence).

There has not been much discussion of divergences here but I would rather not trade against one. Thinking of an indicator as a measure of crowd psychology, the crowd just hasn't got the energy level of before. While these divergences in this case are kind of slight they are a sign of caution to me. Brook(E(lise)); Thought I'd nose in on your exchange with David re: the T chart. It looked overheated to me. The stock price is higher than the peak of 28 May yet the MACD 8-17-9 has reached a level that is slightly lower than the level of 28 May. That divergence spells weakness for this level at this time to me. The volume level is not as enthusiastic as it was around late May either. My Slow Stochastic 14 has the same divergence and doesn't look so hot either. RSI - same thing. While the long term may be better this time to me doesn't look like the best entry point. The Brad CCI and MACD 5-35-4 show double tops while the stock has gone higher (again a slight divergence).

There has not been much discussion of divergences here but I would rather not trade against one. Thinking of an indicator as a measure of crowd psychology, the crowd just hasn't got the energy level of before. While these divergences in this case are kind of slight they are a sign of caution to me.
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