Will LEH be going down ?
July 21st, 2008 | by winsonlee |
After going through a few lesson, it is about time to put some of the theory into practical use.
Past few days I heard a lot about volume and stochastics. Another hour before the New York Stock Exchange starts trading. The above chart is referring to Lehman Brothers Holding. According to the stochastics chart, on 14 July, the price went down to 12.40 and it was at the “oversold” territory. When it is at the “Oversold” territory, true enough that it went up after that. The share price went up for four days and close at 19.11 on Friday. Within the period, it went up a total of 54%. On the Stochastics chart, it is clearly indicating that it is at the “Overbought” territory on Friday and %K is going to move accross %D. When %K is about to move accross %D, again this indicate that this share is having a downtrend. Another sign can be seen through the candle stick. On friday, the candle stick is shaded in “Green”. Green actually shows that there is a gain for the share within the day. A highlighted green actually shows that the share opens higher then the previous closed on thursday, but it close lower then the current day opening. To my personal opinion, this share has been moving up with a gain of 54% for four days and on Friday, it started loosing its momentum and that was one of the reason the closing is lower then the opening. With a gain of 54%, not suprising when a profit taking takes place as people will sell to cash back their money.
PS : The above comment is purely according to my own opinion. It may not be accurate at all as I am commenting purely based on my personal logic and common sense. Some common sense may not be common after all. Did I mention that I am new ? So read at your own risk. Feedback and comment is more then welcome as different people may have different view on the market. Knowledge is to be shared and not to be kept in the threasure chest.
