Most graphing tools include a stochastic tool which is a chart that displays the overbought/sold oscillator and a short term trend indictator. Stochastics usually has two lines, a FAST line and a low line, usually referred to as a K and D line. Traditional stochastics would indicate an oversold signal if the K line turns above the slow line.
Now, let me clarify one point. I am NOT a technical analyst. As a trader, I dont like fundamentals since I may only hold a stock for a few minutes. As well, technical analysis fails as well for short, short term trading.
But I do hold a few positions long. SIII is one of them. I evaluate any long term positions by a combination of fundamental and technical. I have pointed earlier to my fundamental analysis as to why I like SIII. Technically, the stock is showing great support at 12ish and looks to be creating a base. Anyone looking get out has had plenty of opportunity. Stochastics indicates an oversold condition which might lead to a rallying. But stochastics is cyclical. Eventually, you will get an overbought signal. The signals are not always right. You might get a spike of 1/2 on low volume and then big nice volume down an 1/8 and that would be over bought.
End result, I recommend avoiding any one analysis but rather incorporating a few. As a trader, I like looking at times and sales and seeing the size and types of prints to indicate whether the stock is being acquired or distributed.
I like that the stock is now moving up slightly on low volume which may indicate that selling pressure is subsiding. I like the news, i like the product, i like the market share and, I know those who paid much higher may hate this, but I really like this price. You can not find that many companies with the above mentioned qualities at such a low multiple (that is assuming company doesnt totally blow it and make $.20 next year).
Patience and selectivity is the most important virtue in the marketplace.
Regards,
Steve |
