TO: Those with an interest in TA of FORE. . .
I did some TA on FORE tonight and thought I'd report my findings on the thread for discussion purposes.
WARNING: I normally rely on eastern TA (japanese candlesticks) but I'm trying to look at western methods as well. I am not as adept at the latter. In terms of the candlesticks, today's failure to close nearer the open suggests the bottom is NOT in place yet. The western TA summarized below confirms the continuation of the current downtrend as well.
FORE has been trending lower since early July. Thus, its downward sloping resistance and support trendlines have been in force more than 4 months. The willingness of sellers to sell at lower highs shows that sellers have been more aggressive than buyers throughout this period.
Both trendlines have been successfully tested each of the last 4 months. The resistance line held succesively @ 28, 26, 22 and 17.5 in July, Aug, Sept and Nov. While the support line held @ 22, 16 and 10 in Aug, Sept and Oct. The length of time these lines have been in force and the number of times they have been successfully tested indicates the degree of their strength. Volume has ranged from low/moderate to moderate/high on all peak and trough ocurrences.
Retracement from peak-to trough-to peak has been fairly consistent throughout this period: 66%; 60%; and 62%.
The question at hand is whether the current price of ~13.5 is a bottom. To answer this question I have analyzed Momentum: RSI; MACD; OBV; Money Flow; Volume; and, Stochastics. My findings are shown below.
__MOMENTUM: Is negative and accelerating (very bearish).
_______RSI: @40 and declining. Must reach 30 to indicate oversold condition. No positive divergence exists (in fact, a small negative divergence exists).
______MACD: The signal line has recently fallen below the slower line, indicating a SELL condition.
_______OBV: Is moving in the same direction as price and also shows no positive divergence.
MONEY FLOW: Is moving in the same direction as price and also shows no positive divergence.
____VOLUME: Volume has been modest since the last test of resistance, which makes a trend change more likely. Today's volume, however, was higher than you'd like for a bullish test of support.
STOCHASTICS: %D <25, indicating oversold (bullish). %K is not yet crossing %D, but is headed that way (potentially bullish). There is no noticeable positive divergence. All three conditions are generally required to trigger a buy signal.
All of this strongly suggests we're going lower. Next resistance appears to be 12+. Anyone else following any of these indicators?
ed |
