October 6, 2008
Support and Trendlines
By Planet Wealth
When analysising a stock it is usually for the purpose of looking for a trade, but we should also be able to see when a stock is not excellent for trading.
AMP is not trading in a fantastic area of the chart right now. If we take a look at the weekly chart, the first thing we notice is the trading range is around alot of different supports/trendlines that are close together. This makes any breaches of these lines potentially small lived, and they may not be valid signals.
Though it has been producing Higher Peaks(HP) and Higher Troughs(HT) since July suggesting that buying is strengthening, the Moving Averages (MAV) have crossed and the stock is rebounding off them, suggesting that the sellers still have the majority.
When a stock cannot breach with a clear run and signals are conflicking about who is in control, it should be ‘side-lined’ until it gives some clear direction.
(click on image to enlarge)
AMP - ASX
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