SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : MFN Mercury Finance
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: 4-UR-Eyes-Only who wrote (1025)2/28/1998 4:07:00 PM
From: DanZ  Read Replies (2) of 1239
 
Goes to show you why I don't think technical analysis works on stocks in this price range. That is funny. LOL

I do think that money flow can be used to analyze stocks in this price range and I'm sorry to say that it doesn't look very good. For those of you who don't know, money flow is calculated by subtracting the dollar value of trades on down ticks from the dollar value of trades on up ticks. A trade on a down tick is an outflow of money from the stock and a trade on an up tick is an inflow of money into the stock. A negative result indicates that more money came out of the stock then went into it that day.

I think the best signals are generated when a stock is trading near an extreme such as a 52 week high or low. Here are my general guidelines for using money flow. The magnitude of the money flow and is also important when using these guidelines and you should look at more than one day before drawing a conclusion.

1. Stock is trading near a 52 week high and money flow positive:
a. Very bullish if the stock makes new highs
b. Bullish if the stock meets resistance at the high
c. Neutral if the stock pulls back

2. Stock is trading near a 52 week high and money flow negative:
a. Neutral if the stock makes new highs
b. Bearish if the stock meets resistance at the highs but doesn't take out the previous day's low
c. Very bearish if the stock takes out the previous day's low

3. Stock is trading near a 52 week low and money flow positive:
a. Bullish if the stock takes out the previous day's high
b. Neutral if the stock doesn't move higher
c. Bearish if the stock moves lower

4. Stock is trading near a 52 week low and money flow negative:
a. Neutral if the stock trades higher
b. Bearish if the stock meets resistance but doesn't take out the previous day's low
c. Very bearish if the stock makes a new low

The money flow in MFN was very negative (big magnitude) the past five trading days while the stock is testing its 52 week low. I view this as bearish because it indicates distribution at the 52 week low. Going further back, the money flow has been negative 16 out of the past 18 trading days.

Good luck to everybody who is holding this stock. Keep in mind that money flow is only one indicator and it can turn from negative to positive. However if the distribution continues, then eventually there won't be any more buyers at 1/2 to absorb those who are selling and the stock will move lower.

Dan
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News