M Goodson,
I don't know about Peter's indicators but by RSI (which I use a lot), Parlux nearly crossed the RSI 30 line yesterday, indicating an oversold condition. The situation was almost identical to the 9-10 Sep 96 period where PARL dropped substantially and then rebounded sharply. The difference then was that the RSI did actually spike below 30 indicating an oversold condition. This resulted in the spike up afterwards which was then quickly subjected to profit taking. Since 10 Sep, the RSI has actually been increasing the entire time until recently when PARL dropped below $4.00 a share. Since 10 Sep there has been a negative divergence between RSI and Price, with RSI increasing and Price decreasing. It's more difficult to identify an overbought situation since we all know how undervalued PARL is based on the news that is already out. The best we can do is use trendlines on the RSI. A few times during the last few months the price has picked up to $5.00 and a little over. The first time, the RSI went up to about 50 and the second time to about 57.5 far short of the 70 RSI needed to easily identify an overbought condition. However, using trendlines, both of these points and a few other lined up, so the trendline essentially acted and will continue to act as the overbought situation. Right now, PARL is at or is close to being a short-term buy solely from a technical perspective based on the low, near 30 RSI and the uptick in price today. It will also likely be subjected to severe profit taking very early in a sustained rally. A technical rally needs to be supported by some positive news. That positive news should not divulge all the positive news at one time, to mitigate severe profit taking on its release. Looking at the RSI trendline, it will be impossible for the next PARL rally not to hit the 70 overbought line. This will probably correspond to a price of about $5.00 to $5.50--best guess without creating data and seeing where that takes us.
A person I work with today mentioned PARL to his uncle who is heavily involved in the import/export business including perfumes. He is familiar with PARL and made the comment that Lekach is a very slimy, not to be trusted type character.
I'm interesting in hearing what technical indicator(s) Peter uses.
Wayne |
