Hi Cush,
That is one sick chart! YUCK
stockcharts.com[w,a]dicayymy[dc][pc5!c21!c50!c200!h.02,.20!f][vc60][iut!Ul14!Lc20!La12,26,9!Lh14,3!Lb14]
FWIW, I agree with your comments regarding the prolonged oversold condition of both the RSI & the Stochastics.
I find that when I am in doubt of whether or not that the market (or stock) is trending or oscillating, I look to the ADX for final confirmation. As you can see on this chart, the ADX is in a very steep uptrend @ about 42 or so, note also the the -D1 also @ 42 & that the +D1 is @ 15 (approx.)
So my interpretation of the ADX follows:
Negative.... ADX indicates that a very strong trend is in play, in this case down, note that ADX can (although rarely), trend up to 60 (extreme reading), the -D1 indicates that the bears are in control, +D1 indicates that the Bulls are being swamped by the Bears. I would wait until the ADX turns down, & the +D1 crosses over the -D1, if I was looking for a break in the trend to go long in this market.
In a strongly trending market... oscillating indicators are useless... the ADX helps me to determine whether or not to rely on RSI & Stochastics or Macd... In this case wait for the Macd buy signal...IMHO
Regards,
Peter |
