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SPH: A new high.

Sunday, August 1, 2010

SPH hit a new high of $4.20 early in the morning of the last session and closed at $4.13, up three cents from the previous session.  Volume almost quadrupled from the previous session and this has corrected the negative divergence I have blogged about recently.




The MACD is once again pulling away upwards from the signal line in positive territory.  The MFI is rising after forming a higher low, suggesting that demand is healthy.  OBV turned sharply upwards, indicating ongoing accumulation.

Immediate support is resistance turned support at $4.08. Immediate resistance is at $4.20, the new high.

Related post:
SPH: Rising on low volume.

6 comments:

Anonymous said...

Hi AK,

First of all.. congrats on getting your new car :) ..

Anyway, hope u dun mind me asking some noob qns on TA of sph.

firstly, although price makes a new high, but the macd histogram does nt make a new high.. is tis considered a negative divergence?

next, how come even though price closed lower with a black candlestick but obv and mfi still shows increasing accumulation and demand ? Does this means its a bullish sign ?

regards

B

AK71 said...

Hi B,

Thanks. I am still feeling a bit high from the purchase. Maybe, tomorrow, I would feel differently. Haha.. Nah. I think it's a good move. :)

On to SPH. I look at the MACD and this has formed a higher high as well. So, I don't see a negative divergence. The histogram is used only to spot buy and sell signals for me.

The MFI and RSI are measurements of momentum. They are telling in terms of demand (price + volume)and the strenth of a price movement, respectively. OBV shows accumulation or distribution activity.

I use MFI and OBV against each other to give me more layers of information. If MFI and OBV are both up, bullish. If MFI and OBV are both down, bearish. If MFI is up but OBV is down, demand is present but there is some distribution and suggests some weakness. If MFI is down but OBV is up, demand is flagging but there is accumulation and this shows some underlying strength.

I use RSI as a reinforcing indicator to the MFI as they both measure momentum but MFI is more telling for me because it considers volume done too.

The thing to remember is that these indicators are very often lagging. So? Compare the trends in MFI and RSI with that of price and look out for divergences. That helps you spot possible turning points in the trend.

Hope this helps. :)

Anonymous said...

hi ak

thanks for the info.. it was really helpful although i had to read it afew times to grasp the meaning .. abit cheem for me haha..

regards
B

AK71 said...

Hi B,

I'm glad my explanation is helpful. :)

There are many TA tools out there and I only use a few which I am comfortable with. You could try out different tools before settling on something you are comfortable with as well.

Woke up and having trouble going back to sleep. Sigh.

Have a good week ahead. :)

Anonymous said...

Hi AK

maybe u r too excited about ur new car to slp . haha

anyway, most of the books i read also focus on rsi, macd lines/histograms , obv and stochastics ... so nw i will jus focus on learning how to use these few indicators 1st bah.. and i also read ur blog everyday to learn more stuffs from u :)

hope u have sleep-full week ahead

regards

B

AK71 said...

Hi B,

Thanks for visiting daily. :)

Nah, my brain was too active thinking about the crisis at work and how I would deal with it. Partially solved the problem today. Hope to make progress before the month is up. Yes, it's quite complicated.

I also hope to get some quality sleep. ;)

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