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FSL Trust has moved above its most recent downtrend resistance on 27 May and has established an uptrend support since it bottomed at 42.5c on 21 May with a white spinning top. That white spinning top has delivered as a reversal signal, it would seem.
The MACD has crossed above the the signal line in negative territory. MFI has formed a higher high after being resisted at 50%. OBV has stopped declining. All the technicals suggest that downward pressure has eased and that its price might now be basing.
Should we buy some now? As a hedge, maybe. We have to bear in mind that price has been rising recently on very low volume. If price starts declining again soon, we would have a lower high formed and we want to see that 42.5c is not tested again (in which case, it would form a higher low) or, if it is tested, it should hold up (in which case, it might form a double bottom). If 42.5c breaks as support, a new lower low would be formed, which is bearish. Then, the MACD's bullish crossover in negative territory would have just been signalling a rebound and not a more bullish reversal.
So, I might hedge with a smallish long position but I would only buy more if I see clearer signs that price has bottomed and that it is recovering.
Related posts:
FSL Trust: A sinking ship?
FSL Trust: That sinking feeling.
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