Posts Tagged ‘Overbought Security’
The OBV-EMA 3 method used on the S&P 500
Here it is. A lot of you wanted to know about how the method I wrote in my Advanced Tutorial on the OBV-EMA 3 trading method worked on the S&P 500. Well, it doesn’t. The S&P 500 is a true index and as such has NO Volumes on it and therefore no ON BALANCED VOLUME or OBV. However, to circumvent this problem, I have here used the S&P 500 large-cap futures, the SP, and the continuous version offered by eSignal that takes care of the seasonal endings of futures in general. Below you have the result and it is indeed bullish, though not to a strong extent. On the short term the MOM and RSI seem to be high and maybe ready for a respite. But I do believe that the short sideways that may be will be very short and the buyers will be back after a relatively short time no doubt. This means for the world that a wait and see attitude is to be taken about financial considerations in general and the world’s stock markets in particular.
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Take a bite of this!
Apple Computers(AAPL), which last month broke its’ all-time high, is not showing many signs of letting up. Although the RSI is 70.67 and that is above the 70 value indicating overbought (that is usually a signal to sell), it IS going down from 77.44 two weeks ago without losing momentum on the price line. The MOM, or momentum indicator has also gone down to decent levels and looks, similar to the RSI, to be upwards pointed again. the test of OBV and EMA 3 of yesterday’s close shows a bullish run still in progress. And finally, Volumes that were going down for about a month and a half are now going up all last month. This shows a renewal of momentum after a small slow down. This is a good, solid investment because of the Computing Revolution I believe is beginning to take place worldwide and to which, to my opinion, Apple will take a major part. I must write this over this medium but I would say it over any medium again and again. We are in the beginning of a new era for Computing. The smart ones will come out shining. Apple is smart.
This is the way the Chart looks:
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System Pro
An hyperbole is a mathematical shape, or curve, on a graph and indicates the object (X axis) going up on ;the Y axis. First slowly, then faster, then still faster until it approaches infinity. It is obvious to see in the chart shown that this is the case today for the System Pro equity, traded in Japan. As they say, what goes up, must come down. Here, sometine during trading (which is to begin in about3 hours) the stock has an excellent chance of tumbling down, though from experience I would say not so quickly as it came up. If you can short on it it is a good bet, and not to wait long during the next trading session lest the euphoria that will eventually explode catch you not shorting in time or worse, putting a long on it!
Check also the RSI I pointed to below, it is highly overbought and supports my thesis.
This is the way the Chart looks:
