Wednesday, June 20, 2007

Trendlines for Novice

Part 2
To find major support and resistance levels, one way is to draw trendlines on chart. It is always possible to find the direction of a particular stock is headed by connecting more than 2 points price tops and bottoms on a chart.
Below appears to be going down in price for EKSONS after connecting the tops price like so. Oscillators like MACD and RSI show down signal :-

Below appears to be going up in price for MAYBULK after connecting the price bottoms as follows. MACD seem crossing showing buy signal and RSI is above the 50% strength level. MAYBULK seems very interesting trading at this price, probably an upside is to be formed in the later stage.

Why did i say so for MAYBULK, it is because if you buy on or near the line, when/if the line breaks, you will get out very near where you got in. Not only that, you will have a clear set of reasons why to get out. That is, you will know that the trend has broken down and that the situation that caused you to enter the trade has changed. Base on current market and the trendline, i would recommend a buy for MAYBULK on current state.
Till then happy trading.

No comments:

Related Posts with Thumbnails