April 3, 2009
Bottom of the Market?
By Planet Wealth
There is a lot of talk about this being the bottom of the market. So how do we really tell when a bearish stock has become a bullish stock?
In previous posts I have spoken about peaks and troughs. Higher Toughs (HT) are an indicator the bulls are in control as each low is higher than the previous there for trending up. Lower Peaks (LP) are when a stock fails to exceed the previous high thus trending down.
So HP and HT would be the first indication a stock could be turning bullish. The second to look for is a breach of the longer term down trend line. If you combine these two and get HP and HT above the trend line, a stock could then be regarded as Bullish.
Take a look at CPU. Major Hp and HT have been forming on the weekly chart since December. Now it sits just below the long term down trend. If CPU breaks through the trend line, then comes down and bounces off this trend line as support a HT will form above the trend line. This would then make CPU a bullish stock.
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Topics: bullish signal, Technical Analysis | No Comments »
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