Take a look at the following chart and notice the breakdown of the short term trend follower line.
This is a daily chart and there are some things to
pay attention to:
1. Stochastics oscillator is in the sell zone (bear)
2. MACD has positive divergence, in spite being less than yesterday's value (bear)
3. RSI still in buy zone ( over 50 - bull )
4. Today's volume appears to be lower that yesterday's one, so I guess this isn't bear...yet
5. Linear regression didn't invert yet (bull)
Based in this and in the fact that the weekly chart is still bullish, my expectiation for now is that last week's movement is now being corrected. I would say that, in the worst case, the 61.8% Fibonacci level (17.2) will hold this correction. If not bulls may be in trouble!
3 comments:
All the Best..
It seems to be a great trend following indicator but would it really help in a range bound market??
Can it be usefull in our Indian market I have to see because an indicator which functions well in one particular envoirement does not in another.
Kindly let me know at pankaj.aag76@gmail.com
Regards,
Pankaj
Hi Pankaj.
I'm not quite sure about what you do intend by a "range bound market". However, I do know that every trading system has its flaws and imperfections.
My trend follower wasn't developed to foloow a particular market. It follows all them in the same manner. It is a single algorithm and does not take into account any other indicators.
If by "range bound market" you mean a sideways market, well..its performance will depend on the amplitude of each wave.
Regards.
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