Posts Tagged ‘Oscillators’
Frankfurt’s Infineon Comes Up Short
Here is Frankfurt’s one and only INFINEON TECH, who has recently started a new upwards trend. Upon first glance at the chart below, it is my gut reaction to say “good time to buy” because it has indeed hit the supporting upwards trend line and should be at an optimum price for a strong buy. But technical factors, and too many of them, are in the way.
For one, a very natural line can be drawn above the current trend. This and the line of the trend itself form a pattern we call an opening fan. These can become unstable as they run their course and for the short term, these 6 weeks are enough. The pattern is expected to break soon and it will probably be in the downwards direction because several technical factors are here to influence this.
For one, the Moving Average 5 has been crossed by the MA 21 and the MA 13 is on its way to do the same. Five days ago the Directional Movement DI+(blue) crossed the DI-(pink) going downwards, a clear sell signal. And the Price Oscillator shows a slope down to zero and heading into negative territory, this being another strong sell signal. Add to this failure to be supported at current levels, and the fact that the nearest support below is at 4.43, about 10% below current market price, and here you have a good case for a sell-short position on this darling equity.
This is the way the Chart looks:
Share and Enjoy
Centennial For Australia
The Centennial Company of Australia is indeed a cause for celebration. Here at last is a really good looking start of an upwards trend. I say so because we can see this proven through some very important technical parameters. First off, the new brown upwards sloping line on the Daily Chart below indicates to us a fresh trend developing. Then, check out the vertical line in blue showing the day that all 3 Volume Weighted Moving Averages crossed each other and lined up in a buying signal; that is, lowest the fastest (13 day), and in the middle the medium range (21 day), and above the longer and slower 34 day VWMA.
The Directional Movement Indicator’s pink line has moved below the blue line recently and convincingly, and it is already below the orange line. This shows us that the DMI is signaling a buy position. In addition, the Price Oscillator is at an extremely low point indicating a relatively low price level as measured over the average price levels in the last 21 days. This provides us with a good entry point at a cheap price relative to this stock and to the time frame. Check out the Daily Chart to see what I mean.
This is the way the Chart looks:
Share and Enjoy
Understanding the RMO Oscillator
The Rahul Mohindar Oscillator can be used across any time frame and for any financial instrument. It is designed to work with both Bar Charts and Japanese Candlestick Charts. This indicator is a gauge as to market direction and can be a primary trend indicator in many trading systems.
The RMO is displayed as a histogram. As a bullish “buy” sign, we will look for the point at which the histogram shows movement crossing the oscillator’s zero line going upwards. If it should go down and cross the line going down, that would be our “sell” sign, or a “short-sell” sign.
The complete trading system is available through the Equis International MetaStock Charting Software. An example of the complete, 5 step method is shown in the Chart below.
This is the way the Charted RMO Trading Model looks using Apple Computers(AAPL):
published by MetaStock(www.equis.com)
The RMO Oscillator, explained above, is the green graph shown at the top window of the Chart. This indicator is the first gauge as to the market direction. Once the primary trend is determined, the second window should be observed.
The second window of the Chart contains Swing Trade 2 in pink, and Swing Trade 3, which is purple. These two indicators are designed to help us see the medium term and the long term trends. The pink histogram (Swing Trade 2) represents the medium term trend and the purple histogram (Swing Trade 3) represents the long term trend. When the histograms cross each other, it represents a change in the strength of the trend.
Moving forward past the third window for the while, we see the blue and red Bar Chart below it. The red and blue alert arrows and the color of the bars on the Bar Chart represent the crossing points of the Swing Trade 2 and Swing Trade 3 histograms. These signify a change in the strength of the trend. Blue bars are taken as bullish signals, while Red bars are bearish.
To enter a long buy or exit a short sell position, three conditions must be met:
1. The RMO is currently above zero.
2. The most recent alert arrow must be blue.
3. The price bars on the Bar Chart must have become blue at or before the examined time frame.
To enter a short-sell or exit a position, the reverse must be true on all three conditions.
Now to the third window that we skipped before. This is the exit swing indicator and gives added protection when applying stops by having us put in a trailing stop at certain situations. The rules for applying this is that first you must be invested and in a profitable position. If you are in a long position, for example, and this indicator falls below the red horizontal line demarcating the chart, consider putting a trailing stop below the trade. And if this indicator, called the exit swing indicator crosses above the blue line demarcating the chart, consider putting a trailing stop above your short sell position.
This is just one example of the many different and complex trading methods in the Science of Technical Analysis. It has a whole realm on to itself that can never be beat by any other method of Market Analysis for success rate, popularity and enthusiasm which investors using it see. This world must be examined by all who wish to invest and those who put it off or blame it for certain disasters speak from a stance of utter ignorance of the Science, for if they examined even the simplest line studies, they would know the truth.