Brian,
I am no technical guru by any stretch of the imagination, so I use the stochs to give me a general sense of overbought/oversold. I follow three time frames: 10 min, daily and weekly. The daily stoch crossed into overbought territory on October 15, and has remained there ever since, not an unusual occurance for a strongly uptrending stock. It has started to roll over with a bearish crossover (of the daily) occurring on October 28. The MACD manifests a similar pattern though it lags the stock a bit, with the fast line starting to turn down.
However, the weekly chart paints a different picture with recent bullish crossovers in both indicators.
To my untrained eye this means some short term consolidation or pullback is likely while the longer term view is favorable. The stoch can head all the way south without much decline in price, so I interpret the situation to be one where an immediate price improvement is not indicated, not that there is an imminent decline forthcoming. Whether we are talking days, weeks, etc. I cannot discern.
Frankly, almost anyone out there probably knows more about these indicators than I do... and I would be happy to stand corrected on any misinformation I may be conveying. I use the indicators in conjunction with my fundamental research and ignore them whenever I want to, relying on them mostly for help with timing. My guess on CELL: it will hang out around here for a while before resuming its march onward... |
