YeOldGoldNugget's Blog Spot: Overbought

Showing posts with label Overbought. Show all posts

Tuesday, December 22, 2009

US Dollar Extends Gains

By 79Atoms on Tuesday, December 22, 2009

The Dollar Increases on the Euro's Decline.

US Dollar Daily Chart

Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis

(What's this?)

I'll just do a quick run down on the chart.

I've added the ADX chart. Again on the ADX for those who have not used this indicator before, the Average Directional Index can determine trend strength regardless of the market direction. This non-directional oscillator is based on a range of 1 to 100 (although movements over 60 are rare). If the line is under the 20 mark, the trend is considered to be weak. If the line is above the 40 mark, the trend is considered to be strong. The ADX line is built on the results of two separate technical indicators, the +DI (force of up-moves) and the –DI (force of the down-moves). The default for this study is 14 periods which takes into the consideration the measurements of the +DI and –DI for the last 14 periods.

Knowing that and looking at the chart, you can clearly see that the -DI has had the upper hand for most of the year since March 2009. That changed however early December when the dollar started rallying on the very bad news that was coming out of Europe and in particular from Greece, Spain, Portugal and Ireland.

Have a read through following article.

The MACD or Moving Average Convergence Divergence is clearly trading upwards and on the daily trading above the center line. It has not been above the center line since March 2009. So daily and thus short term the trend is UP.

RSI or Relative Strength Index has reached the overbought zone.

To summarize, short term, yes we are in an UP trend, the chart confirms that. However, RSI has reached overbought. MACD is trending higher but with choppy performance. We are trading farther and farther away from the 30 and 50 MA so a consolidation is getting more and more likely to happen from here.

US Dollar Weekly Chart

US Dollar Weekly Chart December 23, 2009

Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis

(What's this?)

MACD, well we are still trading below the center line which confirms that weekly we are still not out of the woods yet. The histogram however shows a nice steady increase, one which qualifies as being strong and steady.

RSI is hovering around 50 which leaves plenty of room either UP or DOWN.

From earlier on in the article you already read about the ADX indicator. Well, then you know that the blue line does not tell you anything about the direction but merely the strength of the trend. Our blue line thus was increasing from March 2009 until the beginning of December 2009. Now because the dollar was dropping since March our blue line thus indicated that there was a strong DOWN trend.

Now that we see the ADX bending down and going lower we can thus assume that the strength of the down trend has decreased.

The +DI however was trading upwards but has now flattened out so I will have to wait and see if we get any higher beyond from where we are now.

From the chart we also see that we are now trading above the 10 and 30 MA on the weekly. That still leaves us the 50 MA at around 80.56. Until we have clearly taken out the 80.00 there is no difference to the long term trend...which is still DOWN by the way.

YeOldGoldNugget's links of interest

Friday, September 25, 2009

Orko Silver Chart September 25, 2009

By 79Atoms on Friday, September 25, 2009

Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

Today's trading brought us well under the 10 Moving Average line and we saw the stock close at 0.88 (-2.22%).
What the chart tells me is that although we dropped a bit further towards the 0.85 the action today was promising. The volume of shares traded has decreased and with that also the number of sellers. I see this as a positive sign meaning the consolidation is just that, a small consolidation which only purpose it is, is to get out of the overbought zone.

The other thing that's positive is that although the stock opened lower at 0.87, we still managed to close higher at 0.88. Besides that, after opening there even was a run up to 0.90 which also was the high of the day. So that tells me that although the bears might have won an earlier fight, the bulls are already showing their horns again. Already after just two down days this stock is already showing strength. Strength in the holders that is!

The point where sellers are few and far between might even be nearer than any of us might think?

The Relative Strength Index is already nearing the 50 line which is a comfortable zone for a stock to be in and it is again attractive to investors. My guess is when we either hit or dip a little under the 50 line we can expect renewed interest, a heavily reduced number of sellers and a heavily increased number of sellers.

The stock is still not out of the woods yet but today's action definitely should be of some comfort to holders who entered in higher, for the rest of us lower holders even more comfort and for new to be holders maybe next week will provide us with a perfect entry point...or rather a train ticket on the Orko Silver Speed train to the next stop which is a close and stay above 1.00.

Monday's action is probably wholly dependent on what happens on the COMEX next week. I don't really think the consolidation in gold and silver is over as of just yet.
The US dollar

is trying to start its rally after it dipped under the 76.00 last Wednesday. I see the dollar getting no further than 78.00 though. After the dollars last failed attempt to breach the 78.00 gold will not only start its march to 1033 but it will also break the all time high.

The writer is x-times as bullish on silver then gold.

For Monday I'm hoping we get a bit lower to the 0.85, until that happens we shouldn't look to hard for any reversal or an end to this consolidation.

As always, take care and prosper!

YeOldGoldNugget's links of interest

Wednesday, September 16, 2009

Orko Silver Chart September 16, 2009

By 79Atoms on Wednesday, September 16, 2009

Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

I've included a 3 month chart to better highlight the nice run up we've had the last couple of days.
I also have to say I've not encountered many stocks which perform so well like Orko Silver has done over these almost 2 weeks. Not that we've seen high rallies or anything like that but the performance of Orko is just really really good.

Not that many stocks trade that long in the overbought zone without showing any signs of consolidation. This must mean that Orko Silver is appreciated by the market and investors acknowledge its huge potential.

I again read a post on stock-house today about the index Orko Silver is included in. A story known to me since it was already one of many reasons why I decided to invest in Orko Silver.
If you're not familiar with this index,..I'm referring to the McEwen Capital Junior Gold Index.

And since we made a close over 0.90 we have here what I like to call

the last days of bargain sales.

meaning that as of today we really have entered a stage in which investors themselves will want to see this trading above 1.00 and soon to be investors will be more than eager to buy with a limit of anything under 1.00. Anything under 1.00 is now considered a sale....and they would be right about that.

Every technical indicator is pointing in the right direction, everything about this chart is telling me this wants to go even further and higher.

I think we can be brief on this one today.

Tomorrow,...going up!

Cheers and good fortune.